annual report and csr report 2020 - union investment

annual report and CSR report 2020

2

Union Asset Management Holding AG 2020 annual report

Contents

Foreword 5

Report of the Supervisory Board 6

Group management report of Union Asset Management Holding AG 9 As at 31 December 2020

A Basic information on the group 10

B Economic report 13

General economic and industry conditions 13 Specificbusinessperformance 16 Business environment 20 Research and development 23 Positionofthecompany 27 Dependent company report 34

C Corporate governance declaration 35

D Forecast report on risks and opportunities 35

Report on opportunities 35 Reportonrisks 36 Forecast 40

E Non-financial statement 40

Consolidated financial statements of Union Asset Management Holding AG for the financial year from 1 January to 31 December 2020 Consolidated income statement 42 Statement of comprehensive income 42 Consolidated statement of financial position 43 Statement of changes in equity 44 Statement of cash flows 45 Notes to the consolidated financial statements 47

Basisofpreparation 47[1]Principlesofgroupaccounting 47[2]Accountingpolicies 47[3] Consolidated group 49[4]Principlesofconsolidation 49[5] Estimates 50[6]Financialinstruments 51[7]Fairvaluemeasurementoffinancialinstruments 54[8] Currency translation 54[9] Cash reserve 54[10]Loansandadvancestobanksandcustomers 54[11]Allowancesforlossesonloansandreceivables 54[12] Investment securities 54[13]Sharesincompaniesaccountedforusingtheequitymethod 55[14]Propertyplantandequipment 55[15]Intangibleassets 55[16]Rightofuseassets 55

3


[17]Assetsandliabilitiesheldforsale 55[18]Liabilitiestobanksandcustomers 56[19]Assetandliabilityderivatives 56[20]Provisionsforemployeebenefits 56[21]Otherprovisions 57[22]Leaseliabilities 57[23]Income 57[24] Income taxes 58[25]Contingentliabilities 58

Consolidated income statement disclosures 59[26]Netinterestincome 59[27]Allowancesforlossesonloansandreceivables 59[28]Netfeeandcommissionincome 60[29]Netincomefrominvestmentsecurities 61[30]Othernetremeasurementincomeonfinancialinstruments 61[31]Netincomefromcompaniesaccountedforusingtheequitymethod 62[32]Administrativeexpenses 62[33]Otheroperatingresult 62[34]Incometaxes 63

Statementofcomprehensiveincomedisclosures 64[35]Amountsreclassifiedtoprofitorloss 64[36]Incometaxesrelatingtocomponentsofothercomprehensiveincome 65

Consolidatedstatementoffinancialpositiondisclosures 66[37]Cashreserve 66[38]Loansandadvancestobanks 66[39]Loansandadvancestocustomers 66[40]Assetderivatives 66[41]Investmentsecurities 66[42]Sharesincompaniesaccountedforusingtheequitymethod 68

[43]Propertyplantandequipment 69[44]Intangibleassets 70[45]Incometaxassets 72[46]Otherassets 73[47]Rightofuseassets 73[48]Assetsheldforsale 73[49]Liabilitiestobanks 74[50]Liabilitiestocustomers 74[51]Liabilityderivatives 74[52]Provisions 74[53]Incometaxliabilities 78[54]Otherliabilities 79[55]Leaseliabilities 79[56]Equity 79

Financial instruments disclosures 81[57]Categoriesoffinancialinstruments 81[58] Exposure to credit risk 82[59]Grosscarryingamountsandallowancesforlosses 84[60]Itemsofincomeexpensegainsandlosses 87[61]Fairvalues 87[62]Fairvaluehierarchy 89[63]Contractualmaturityanalysis 92[64]Foreigncurrencyvolumes 95

Otherdisclosures 97[65]Equitymanagement 97[66]Disclosuresofrevenuefromcontractswithcustomers 97[67]Disclosureofinterestsinotherentities 98[68]Listofshareholdings 109[69]Contingentliabilities 111[70]Othercommitments 111

4


[71]Businesscombinations 111[72]Leases 112[73]Financialguarantees 113[74]Numberofemployees 114[75]Auditorfees 114[76]Eventsaftertheendofthereportingperiod 114[77]Relatedpartydisclosures 115[78]BoardofManagingDirectorsofUnionAssetManagementHoldingAG 117[79]SupervisoryBoardofUnionAssetManagementHoldingAG 118[80]SupervisorymandatesheldbymembersoftheBoard 118

ofManagingDirectorsandemployees[81] Miscellaneous other disclosures 120

Independent auditorrsquos report 121

Shareholders and executive bodies of Union Asset Management Holding AG 124

2020 corporate social responsibility report 126

Significance of sustainability 128 About Union Investment 129 Sustainable corporate strategy 131 Sustainable corporate governance and communication 133 Products and services 137 Employees 160 Environmental responsibility 164 Social responsibility 168 Supply chain responsibility 170 Sustainability programme 171 About this report 176 GRI Index 177

Imprint 181

5

Dear readers dear shareholders

The coronavirus pandemic has restricted social and economic life in many different respects We will keep having to deal with this issue for the foreseeable future The capital markets were also impacted by its effects However unlike in other crises there were no massive sell-offs Instead private savers in particular proved very calm

Our customersrsquo strong trust in fund investment is reflected in net sales of EUR 151 billion Our active portfolio management justified this trust particularly clearly in 2020 In equities for example we outperformed the benchmarks to an extent last achieved 15 years ago As a result of the sales and the strong performance of the money entrusted to us assets under manage-ment rose to a new high of EUR 3859 billion Earnings before taxes remained stable at EUR 649 million

New business with private fund savers amounted to EUR 88 billion The volume of private investorsrsquo money thus increased to EUR 1738 billion Once again interest was primarily focused on net asset value For example equity funds saw a net inflow of EUR 38 billion Mixed funds recorded new business of EUR 41 billion while open-ended real-estate funds posted net inflows of EUR 21 billion At the same time there was a leap in demand for sustainable investment products Their share of net inflows of private funds increased from 9 to 55 within two years Once again traditional fund savings plans proved to be the main pillar of new business In September we surpassed the three-million mark for savings plans Including traditional savings plans Riester savings plans and employer-funded capital formation schemes Union Investment now manages 57 million fund savings plans

Looking at business with institutional investors there was a mixed picture Some individual companies needed liquidity particularly in the first half of the year and liquidated major investments By contrast Union Investment posted more inflows in the second half of the year again and closed the year with net sales of EUR 63 billion Assets under management rose to EUR 2121 billion The popularity of sustainable solutions among institutional investors in Germany and abroad remained high

In this context Union Investment increased the volume of sustainable investments across all customer groups from EUR 531 billion to EUR 609 billion This was also attributable to growing interest from private investors Including the volumes that integrate ESG criteria in their investment decisions assets under ESG integration total EUR 2781 billion

So in summary I can say that Union Investment has got through 2020 well in spite of the coronavirus Thanks to sound sales and a positive performance we have further strengthened our position Overall the opportunities in cooperative funds business still outweigh the risks We are therefore optimistic about the future for our company

Happy reading

Hans Joachim ReinkeChief Executive Officer of Union Asset Management Holding AG

Foreword

Union Asset Management Holding AG 2020 annual report Foreword

6

Report of the Supervisory Board

Supervisory Board and Executive Committee

Inthe2020financialyeartheSupervisoryBoardanditsExecutive Committee monitored the management activities oftheBoardofManagingDirectorsinaccordancewiththeapplicablelegalprovisionsandtheArticlesofAssociation anddecidedonitemsofbusinessthatrequiredtheirconsent

TocarryoutitsresponsibilitiesandincompliancewiththeapplicablelegalprovisionstheSupervisoryBoardformedanExecutive Committee that operates in particular as a Human Resources Committee and Audit Committee and prepares the resolutionsoftheSupervisoryBoardTheExecutiveCommitteemetthreetimesin2020TheSupervisoryBoardwasregularlyreportedtoonitsactivities

TherewerenochangesinthecompositionoftheSupervisoryBoardortheExecutiveCommitteein2020

Cooperation with the Board of Managing Directors

TheBoardofManagingDirectorsprovidedtheSupervisoryBoard with regular timely and comprehensive written and oralreportsonthepositionandperformanceofthecompany andthegroupandongeneralbusinessdevelopmentsTheBoardofManagingDirectorsalsoregularlyinformedtheSupervisoryBoardaboutongoingoperationsandfuturebusinesspolicyincludingthecorporatestrategyandorganisashytionalstructuresoftheUnionInvestmentGroup

TheSupervisoryBoardreviewedtheriskpositionofthecompany and the group and examined other material risks specifictofundmanagementbusiness

Supervisory Board meetings

FourmeetingswereheldinthepastfinancialyearAtthesemeetingsandbywayofregularreportsinparticularthequarterlyreportstheSupervisoryBoardwasregularlyandcomprehensivelyinformedofthecurrentpositionofthecompany and the group primarily with regard to general businessperformancekeyindividualtransactionsandanypersonneldevelopmentsTheSupervisoryBoardwasinformed

comprehensivelyandpromptlyoftheworkcarriedoutbytheExecutiveCommitteeTheSupervisoryBoardalsoapprovedmaterialbusinessactionplansOtherkeyissuescoveredintheSupervisoryBoardmeetingsincludedbudgetingtheeffectofregulatorychangesontheUnionInvestmentGrouprsquosbusinessandvariousequityinvestmentmatters

BetweenitsmeetingstheSupervisoryBoardwasinformedbytheBoardofManagingDirectorsinwritingaboutimportanteventssuchaspersonnelmattersInurgentcasestheSuper-visoryBoardapprovedsignificanttransactionsbetweenmeetingsbyadoptingresolutionsbywrittenprocedureOutsidethemeetingstheChairmanoftheSupervisoryBoardwhoalsochairsthe Executive Committee also held regular discussions with the ChiefExecutiveOfficerregardingimportantdecisionsandspecificindividualtransactions

Report in accordance with Section 289f (4) in conjunction with (2) no 4 of the German Commercial Code (HGB)

ThecompanyrsquosSupervisoryBoardhassettargetsfortheproportionofwomenonthecompanyrsquosSupervisoryBoard andBoardofManagingDirectorspursuanttoSection111(5) oftheGermanStockCorporationAct(AktG)tobemetby 31December2021

ThetargetsetfortheSupervisoryBoardis20(3outof15) IntheperiodunderreviewtheproportionofwomenontheSupervisoryBoardwas267(4outof15)

TheproportionofwomenontheBoardofManagingDirectorsinthereportingperiodwas0TheSupervisoryBoardhasdeter- minednottosetabindinghighertargetuntil31December2021

InadditiontheBoardofManagingDirectorshasdefinedtargetsinaccordancewithSection76(4)AktGforthetwomanagementlevelsbelowtheBoardofManagingDirectorsthesetargetsaretobemetby31December2021

Thetargetis25atheadofdivisionlevel(thefirstlevelbelowtheBoardofManagingDirectors)and0atheadofdepartmentlevel(thesecondlevelbelowtheBoardofManagingDirectors)Theaforementionedtargetsweremetintheperiodunderreview

Union Asset Management Holding AG 2020 annual report Report of the Supervisory Board

7

Cooperation with the auditors

Ernst amp Young GmbH Wirtschaftspruumlfungsgesellschaft Eschborn Frankfurt am Main was elected as the auditor by the Annual General Meeting on 15 May 2020 and subsequently engaged by the Supervisory Board to perform the audit

In its capacity as the auditor Ernst amp Young GmbH confirmed that the separate financial statements for the company prepared and submitted by the Board of Managing Directors the consolidated financial statements including the accounting system and the management reports for the company and the group for the 2020 financial year and the report on relationships with affiliated companies as prepared and submitted by the Board of Manag-ing Directors complied with the applicable legal provisions The auditors issued an unqualified audit opinion for each of these items In connection with the audit of the report submitted by the Board of Managing Directors on relationships with affiliated companies Ernst amp Young GmbH confirmed that after due audit and assessment the actual disclosures in the report were accurate the consideration paid by the company for the transactions listed in the report was not inappropriately high and as regards the activities listed in the report there were no circumstances that would support an assessment materially different from that arrived at by the Board of Managing Directorsrdquo

The audit reports were submitted to the members of the Super- visory Board who discussed them in detail The Supervisory Board agrees with the findings of the audit

Adoption of the annual financial statements

The Executive Committee (Audit Committee) chaired by Dr Cornelius Riese prepared for the final examination of the Supervisory Board by reviewing the separate financial statements the management report the dependent company report by the Board of Managing Directors and the proposal for the appropriation of profits which was then given a detailed review by the full Supervisory Board which also held detailed discussions on these matters in the presence of the auditors No reservations were expressed The Supervisory Board also reviewed in detail the consolidated financial statements and the group manage-ment report and here too held detailed discussions on these matters in the presence of the auditors No reservations were expressed here either

The Supervisory Board also acknowledged and approved the findings of the audit of the separate financial statements the consolidated financial statements the management report for the company the group management report and the depend-ent company report conducted by the auditors In a resolution adopted on 26 February 2021 the Supervisory Board approved the separate financial statements prepared by the Board of Managing Directors these financial statements were thereby formally adopted The Supervisory Board also agreed with the proposed appropriation of profits In a resolution adopted today the Supervisory Board approved the consolidated financial statements prepared and submitted by the Board of Managing Directors

Following the concluding findings of the review conducted by the Supervisory Board no reservations were expressed regarding the concluding statement by the Board of Managing Directors in the dependent company report

The Supervisory Board wishes to thank the Board of Managing Directors and all employees for their valuable contribution in 2020

Frankfurt am Main 25 March 2021

Union Asset Management Holding AG Frankfurt am Main

Dr Cornelius RieseChairman of the Supervisory Board


Group management report 2020 financial year

A Basicinformationonthegroup 10




E Non-financialstatement 40

9

Union Asset Management Holding AG 2020 annual report Group management report 2020

Group management report of Union Asset Management Holding AG for the financial year from 1 January to 31 December 2020

Note

Thismanagementreportshouldbereadinthecontextoftheauditedfinancialdataanddisclosures inthenotestotheconsolidatedfinancialstatementsThemanagementreportalsoincludesforward-lookingstatementsthatarebasedoncurrentplanningassumptionsandestimatesratherthanonhistoricalfactsForward-lookingstatementsalwaysapplytothetimethestatementsaremadeUnionAssetManagementHoldingAG(UMH)isundernoobligationtorevisethesestateshymentswhennewinformationbecomesavailableForward-lookingstatementsarealwayssubject torisksanduncertaintyWethereforeexplicitlynotethatactualeventscandiffersignificantlyfromthoseforecastasaresultofanumberoffactorsFactorsthatcurrentlyappeartobematerialaredescribedunderlsquoForecastreportonrisksandopportunitiesrsquoandinothersectionsofthisreport

NoteTablesandreferencesmaycontainroundingdifferencescomparedwiththeprecisemathematicalfigures(monetaryunitspercentagesetc)

10


A Basic information on the group

UnionAssetManagementHoldingAGanditssubsidiaries(UnionInvestment)formpartoftheGenossenschaftlicheFinanzGruppeVolksbankenRaiffeisenbankencooperativefinancialnetworkTheobjectivesandstrategiespursuedbyUnionInvestmentarethereforeshapedbytheguidingprinciplesoftheGenossenschaftlicheFinanzGruppewhichfocusonmutualbenefitanddecenshytralisationInthisstructurethelocalprimarybanksandtheirmembersaresupportedbyspecialistserviceprovidersthatpoolexpertiseinparticulartypesofproductsandservicesandoperateatanationallevelTherangeofservicesprovidedbyUnionInvestmentisaimedatbothretailandinstitutionalclients

InretailbusinessUnionInvestmentservicesareexclusivelyavailabletotheretailclientsofthepartnerbanks(lsquoVerbundfirstrsquo)UnionInvestmentfollowsatwo-stagesalesapproachofferingneeds-basedsupportfortheclientadvisoryprocessconductedbythepartnerbanksItthensupportsdistributionpartnersacrosstheentirevaluechainwithsuitableproductsandservicesenablingpartnerstoofferanoptimalrangeofassetmanagementoptions

TheportfolioofservicesforinstitutionalclientsisdesignedwithinstitutionalinvestorsofvaryingsizesinmindTheseclientsarepartnerbankstheotherspecialistinstitutionsoftheGenossenshyschaftlicheFinanzGruppeandthecorporateclientsofthecooperativepartnerbanksUnionInvestmentalsocompetesforinstitutionalinvestorsrsquoinvestmentcapitaloutsideoftheGenossenshyschaftlicheFinanzGruppegroupforexamplewithpensionfunds

ThecoregeographicalareaoftheretailclientactivitiesofUnionInvestmentistheterritorycoveredbytheGenossenschaftlicheFinanzGruppe(Germany)andbythecooperativebanksinAustriaTheinstitutionalclientsbusinessalsohasaregionalfocusinGermanyalthoughtherearesomeactivities inothermarketsonaselectivebasisThemainlocationsoftheUnionInvestmentassetmanagementunitsareFrankfurtHamburgErlangenLuxembourgViennaandParis

The Union Investment Group comprises various single entities with Union Asset Management HoldingAG(UMH)astheparentholdingcompanyTheconsolidatedgroupofUMHcurrentlyconsistsof23entities1ThemostsignificantequityinvestmentsintheUMHportfoliocanbebrokendownasfollows

bull AssetmanagementcompaniesinGermanyandabroad Bundlingofassetmanagementexpertisefordifferentmanagementstylesassetclassesorregionalcapitalmarkets

bull Financialserviceproviders Offeringofsophisticatedportfoliomanagementinvestmentconsultingsalesandsupportservices

bull Financecompanies Acquisitionandmanagementofequityinvestmentsandpurchaseofproperties

bull Banks Provisionofinvestmentaccountsforretailclients

bull Servicecompanies Provisionofservicesintheareasoffundadministrationandinfrastructureandpurchasesaleandmanagementofproperties

bull Securitiestradingcompanies BundlingoffundbrokerageinvestmentcustodybusinessandfundssalesforvariouscompaniesbasedinLuxembourg

1 ComprisesthecompaniesincludedintheconsolidatedgroupoftheUMHGroupasat31December2020

11


Specificallytherearethefollowingcompanies

ForexternalpurposestheUnionInvestmentGroupismanagedbytheindividualcompaniesaslegalentitiesInternallythemanagementconceptatUnionInvestmentisdefinedbyuniformcompany-andlocation-wideorganisationaccordingtosegmentsThecorecompetenciesofbusinessdevelopmentandportfoliomanagementarebothorganisedintotwosegmentsRetailClientsandInstitutionalClientsfortheformerandPortfolioManagementandRealEstateforthelatterTherearetwofurthersegmentsknownasFundServices(fundadministrationinvestmentcustodybusinessfundbrokerage)andInfrastructure(ITstrategicpurchasinggeneraladministrationprojectmanagement)

Asset management

companies

Union Investment PrivatfondsGmbH

Union Investment InstitutionalGmbH

Union Investment RealEstateGmbH

Union Investment Institutional

PropertyGmbH

ZBI Fondsshymanagement AG

Banks

Union Investment Service Bank AG

Service companies

Union ITshyServicesGmbH

Union Serviceshy GesellschaftmbH

UIRVerwaltungs- gesellschaftmbH

ZBIImmobilien AG

ZBVVZentralBodenVermietungundVerwaltungGmbH

Other subsidiaries

Union Investment Real Estate Digital

GmbH

Financial service providers

Quoniam Asset ManagementGmbH

VisualVestGmbH

Financial companies

ZBI Partnerschafts- HoldingGmbH

Associates

R+VPensionsfondsAG

compertis Beratungsshygesellschaft

fuumlrbetriebliches Vorsorgemanageshy

mentmbH

Asset management

companies

Union Investment SALuxemburg

BEA Union InvestmentLtd

Hongkong

Union Investment Real Estate

AustriaAGWien


Union Investment Austria

GmbHWien

Securities trading

companies

Union Investment Financial Services SALuxemburg

attraxSA Luxemburg

Union Asset Management Holding AG

Germany Rest of world Union Asset Management Holding AG

Segments

Retail Clients Institutional Clients

Segment

Fund Services

Segment

Infrastructure

Segments

PortfolioManagement Real Estate

Centralandmanagementunitsoftheholdingcompany

Support services

IT services strategic purchasing general administration project management

AllthecompaniesoftheUnionInvestmentGroupareallocatedtothesesegmentsInsomecasesindividualunitswithinacompanyareassignedtodifferentsegmentsExceptionstothisarenon-integratedcompaniessuchasjointventuresonaccountoftheownershipstructureandUnionInvestmentequityinvestmentsinwhichself-containedmanagementisbeneficialbecauseofthebusinessmodelinvolvedThesecompaniesaremanagedthroughtheirrespecshytivesupervisorybodies

AsanassetmanagerUnionInvestmentfocusesontheinvestmentneedsofretailandinstitushytionalclientsItoffersretailinvestorsproductsandservicesrangingfromsavingssolutionstoassetaccumulationandstructuringtoprivatepensionschemesThemostsuccessfulsolutions atpresentincludeUniProfiRentethePrivatFondsseriesandbusinesswithfundsavingsplansOtheroptionsofferedtoretailinvestorsincludeequityfundsfixed-incomefundsmoney-marketfundsopen-endedreal-estatefundsmixedfundsfundsoffundsandcapitalpreservationfunds

Business development

Investmentfundmanagement

Investmentcustodybusiness fundadministration fundbrokerage

12


AsoneofthelargestfundmanagementcompaniesinGermanyitisabletoofferanextensiverangeofdiverseinvestmentstrategiesforinstitutionalinvestorsThesestrategiesincludetraditionalspecialfundsanumberofinstitutionalfundswithvaryingstructuresadvisoryandoutsourcingmandatesandinstitutionalassetmanagement

UMHrsquosbusinesspurposeisessentiallytheacquisitionmanagementanddisposalofequityinvestmentsinparticularinassetmanagementcompaniesinGermanyandabroadforitsownaccountFurthermoreitsbusinesspurposeistheperformanceofotherservicesexclusivelyforitssubsidiariesprovidedthatthelawdoesnotrequireaspecialpermitforthisandtransactionsandactivitiesdirectlyorindirectlynecessaryorusefulforachievingitsbusinesspurpose

ThecompaniesincludedinUMHrsquosconsolidatedgroupareoftensubjecttochangesundercompanylawormaterialchangesinbusinesspolicy

In2020UMHAGincreaseditsshareinZBIPartnerschafts-HoldingGmbHfrom499to949FourcompaniesfromtheZBIGroupwillbeconsolidatedinthefuturethealreadyconsolidatedZBIPartnerschafts-HoldingGmbHaswellasZBIFondsmanagementAGZBIImmobilienAGandZBVVZentralBodenVermietungundVerwaltungGmbH

13


B Economic report

I General economic and industry conditions

11 Capital markets

Themonetarypolicyturnaroundbythemajorcentralbankstheeasingoftradetensionsandhopesofanaccelerationinglobalgrowthmomentumhadledtosignificantpriceincreasesinallassetclassesin2019

AtthestartofthenextyearhopesfortheeconomyseemedtobereflectedinthefirstleadingindicatorsTheoutbreakofthecoronavirusinChinainitiallyonlybrieflystoppedthecapitalmarketincreasestonewall-timehighsOnlyafteritspreadtobecomeaglobalpandemicinthefirstquarterof2020didthecontainmentmeasuressubsequentlyadoptedinmanycountriesleadtoasharpslumponthestockmarketsandtheassociatedrestrictionsoneverydaylife

broughtaboutadeepglobalrecessionManygovernmentsandcentralbanksthereforeadoptedextensiveaidpackagesatthesametimetomitigatetheeconomiceffectsoftheepidemicThecapitalmarketsrespondedpositivelyThedevelopmentofthepandemicandtheassociatedglobalrecessionnolongerhadanynegativeimpactovertheremainderoftheyear

Intheearlyautumnasecondwaveofinfectionsswelledandinthelastfewweeksof2020thenumberofpeopleinfectedincreaseddynamicallyagainintheUSAtooFromaglobalperspecshytivethepeakoftheCOVID-19pandemicstillhasnotyetbeenreachednowatthebeginningof2021InmanycountriescontainmentmeasureshavebeenintroducedagainalthoughthesearemostlynotquiteasstrictasthelockdownslastspringThishavegenerallybecomelesslikelyespeciallysincethestartofvaccinationsattheendof2020hasgraduallygivenrisetotheprospectofovercomingtheCOVID-19pandemicanditseconomiceffects

1 hard currencies

SourceRefinitivcorrectasat31December2020

Thecoronayear2020endsonaconciliatorynoteforinvestorsPerformance(in)

Equities

startofyeartoMarchlow March low to yearshyend performance2020

Bonds Commodities

Germany

35

-363

625

Eurozone

-363

-51

489

USA

163

-307

679

Japan

160

-300

658

China

272

-138

476

EmMarkets

166

-273

603

Federal bonds

0811

-03

Euro government

bonds

50

-20

72

Euroshy Corporates

26

-71

105

Euroshy High Yield

28

-194

275

EM government

bonds1

53

-189

298

Brent

-659

1296

Gold

248

-30

-217

287

Copper

260

-248

675

14


OneofthesharpestslumpsincapitalmarkethistorywasfollowedbyoneofthestrongestrecoveriesstartinginthelastweeksofMarchThiswasalsodrivenbyinvestorsrsquosearchforyieldtheliquiditypumpedintothemarketsbycentralbanksandtheoutlookforanupturnin2021ForalongtimethemaindriversofpriceincreasesforequitieswerethebigUSplatformcompanieswhichwereallamongthewinnersintheCOVID-19pandemicSincethepositivenewsregardingthedevelopmentofvaccinestherehavebeensignsofachangeinpreferencestosectorsfromtheldquooldeconomyrdquothatwereparticularlyhardhitbythepandemicTheUSelectionsinwhichDemocraticchallengerJoeBidenemergedasthewinnerunsettledthecapitalmarketsonlybrieflyalthoughincumbentDonaldTrumpdidnotacknowledgetheoutcomeuntiltheendoftheyear

WhilemoststockmarketsrecordednewhighsagainEuropeansharesclosed2020withaslightdecreaseinaggregatetermsdespitethesignificantrecoveryThebondsegmentsallrecoveredtheirlossesagainwiththesupportofthecentralbanksandallclosedtheyearwithgainsInthecommoditiessegmenttheoilpriceisstilldownmorethan20onthefigurefromtheendof2019despiteanincreaseofalmost130sincetheendofMarchBycontrastgoldwassoughtafterasasafehavenandinthecontextofnegativerealinterestratesIndustrialmetalsparticularlybenefitedfromChineseinfrastructuremeasuresOverallthecapitalmarketyear2020thusendedpositivelyforinvestors

SourceRefinitivcorrectasat31December2020 SourceRefinitivcorrectasat31December2020

Globalrecession2020-recovery2021(figuresin)

GDP forecasts Inflation forecasts

2019 2020 2021 2019 2020 2021

GermanyGermany

06

-56

33

13

03

13

EurozoneEurozone

13

-71

44

12

03

07

USAUSA

23

-36

36

18

12

17

JapanJapan

07

-53

29

05

00 00

ChinaChina

61

19

85

29

25

15

15


Thecoronaviruswillhaveadecisiveimpactonthestartofthe2020sonthecapitalmarketsastheeconomicdownturnismuchsteeperthaninthefinancialcrisisandhastakenplaceoveramuchshorterperiodAccordingtooureconomistsrsquoforecastsgrossdomesticproductintheeurozonecontractedby71in2020Germanyseemstohavebeenimpactedrelativelylightlybythecrisisexperiencingadeclineof56TheeffectsarelikelytohavebeenparticularlysevereinFranceItaly(both-88)andSpain(-114)EvenintheUSAeconomicoutputisexpectedtohavedeclinedby36Theeconomyshouldstartbottomingoutinthesecondquarterof2020Theextensiveeconomicandmonetarypolicysupportmeasuresarealleviatingtheslumpandimprovingthemedium-termprospectsWithasustainedrecoverystartingfrommid-2021nationaleconomiesshouldreturntoagrowthtrajectory(GDPforecastfor2021USA+36eurozone+44)

Despite all the progress made in medicine and in dealing with coronavirus generally as well as the startofvaccinationprogrammesanyforecastregardingthefuturedevelopmentofthepandemicinvolvesconsiderableuncertaintyLonger-lastingstricterlockdownswouldleadtoadditionaldeclinesingrowthandfurtherdelaytherecoveryBasedoncomparableeventsinthepastitcanbeinferredthattheeconomiesaffectedsupportedbyfiscalandmonetarypolicystimulishouldreturntotheiroriginalgrowthtrajectoriesaftertheepidemicalbeitwithadelayandpossiblyatasomewhatlowerlevelaslostproductiontimeandconsumptionopportunitiescannolongerberecoveredlater

OnekeypillarinfightingthecrisisisthesupportmeasurestakenbygovernmentsandcentralbanksrepresentingadeparturefromausterityEconomicpolicywillalsocontinuetofocusonpromotinggrowthratherthantacklingpublicbudgetdeficitsHowevercontinuedmonetarypolicysupportwillbeessentialtoensurethesustainabilityofgovernmentdebtworldwideCentralbankswillexpandtheirroleascreditorsonthemarketforgovernmentbondspushingdownyieldsforyearstocomeAlthoughthetaskofcounteringinflationisnotfadingintobackgroundthereareindicationsthatcentralbankswillalsoallowtemporarilyhigherinflationratesifndashasinthepandemiccrisisndashinflationtemporarilyfallssignificantlybelowthetargetlevelsAssuchthenegativelowinterest-rateenvironshymentwillnotonlycontinuebutwillevenintensifyandspreadNegativerealyieldsieincomeafterdeductinginflationwillbecomethenormMonetaryandfiscalpolicysupportisparticularlyimportantfortheeurozoneEvenbeforethecoronavirustheeconomicsituationincountriessuchasItalywasalreadytenseAsaresultofdeclininggrowthandeconomicstimulusprogrammesdebtsustainabilityisthereforedecreasingThisproblemshouldbeaddressedeffectivelybytheEuropeanCentralBankrsquosmeasuresandtheresolvedrecoveryfundmeaningthatthepoliticalriskpremiumsforinvestmentsintheeurozoneshouldfallfurtherThisisalsolikelytoshoreuptheexternalvalueoftheeuro

ThecoronaviruscrisiswillactasacatalystforsometrendsandspeedthemupGlobalisationisalsolikelytoslowdownfurtherandthuslosestrengthasadriverofprosperityandgrowthParticularlyforcriticalgoodssuchasprotectiveequipmentandvaccinesgovernmentswill pushforanexpansionofdomesticproductioncapacityThecrisisalsolaidbarethevulnerability ofglobalsupplychainswhichshouldpromptcompaniestostockpilemoreandshortentheirsupplychainsAllofthiswilltendtodriveupcostsandinflationAnothereffectofthepandemic isthatstrongcompaniesarelikelytobecomestrongerAsalreadyailingcompetitorsareeliminatedthiswillleadtoahigherconcentrationinmanysectorswiththeopportunityforhighermarginsandprofitsinthefuture

Despite the high price increases since March 2020 risk investments are likely to remain in demand as negativerealyieldsarepushinginvestorstowardsinvestmentswithhigheryieldsStockvaluationsmaythereforeremainatanelevatedlevelforalongtimeAsaresultoftheeconomicrecoverycompanyprofitsworldwidearelikelytorisebyupto30boostingsharepricesAgoodstockselectioniskeyinthisenvironmenttooOnthebondmarketsecuritieswithariskpremiumsuchascorporateperipheryandemergingmarketbondsarestillfavouritesInthecourseoftheeconomicrecoverygrowingdemandshouldgraduallyincreasetheattractivenessofcyclicalcommoditiesalthoughpricesrushedaheadofthefundamentaldataattheendof2020

2 Real estate markets

TheeffectsoftheCOVID-19pandemiccouldbefeltonallrealestatemarketsoverthecourseoftheyearWhereasofficeandlogisticspropertiesgotthroughthecrisisrelativelywellretailandhotelpropertiesfacedaparticularchallenge

AsaresultofthecoronaviruscrisisthelettingvolumeintheofficesectorhasbeendecreasingsinceMarchInthiscontentvacancyratesrosemoderatelyonalmostallofficemarketsPrimeofficerentsnonethelessremainedstablealmosteverywhereasnewwell-equippedofficespace incentrallocationswasstillscarceandinhighdemand

LogisticsmarketsalsoprovedveryrobustAlthoughsomecompaniessufferedfromtheeconomicslowdownandinterruptedsupplychainssectorssuchasfoodlogisticsandpharmaceuticalcompaniesinparticulargainedinsignificanceLogisticsserviceprovidersandshippingspecialistsalsobenefitedfromthegrowthine-commerceandthegeneralexpansionintheonlineoffersofbricks-and-mortarretailers

On the retail markets rents in top locations in major European cities are under pressure as rising e-commercesalesandvariouslockdownsin2020ledtoconsiderablylowersalesinbricks-and-mortarretailAlthoughvisitornumbersandsalesatretaillocationsrecoveredrelativelyquicklyafterthefirstlockdowntherenewedclosuresduringChristmasbusinesshadaparticularlyheavyimpactontheresultsfortheyearasawholeThisoveralltrendwasbuckedbypropertiesthatprovidealocalsupplyofessentialssuchassupermarketsdiscountersandretailparkswhichprovedcomparativelyresistanttothecoronavirusandonlinecompetition

Asaresultoftravelrestrictionsandlockdownmeasuresthehotelmarketwasalsoheavilyimpactedoverthecourseof2020OccupancyratesathotelsthroughoutEuropefellsignificantlyandinsomecasesthereweretemporaryhotelclosuresAlthoughsomeholidaydestinationstemporarilypostedapositiverevenuedevelopmentagainduringthesummerholidayperiodonlyveryfewEuropeanhotelscouldlookbackonasuccessfulyearasawhole

Inviewoftheavailabilityofavaccineandtheforecastsignificanteconomicrecoverythepropertymarketsareexpectedtopickupinthesecondhalfof2021Theinvestmentmarketswillalsodevelopmore dynamically in relative terms and property prices are likely to rise in many places over the course oftheyear

16


3 Sales and fund assets

SectorsituationmutualfundsUptoandincludingSeptember2020theGermaninvestmentindustryreportedtotalnetinflowsofEUR146billioninmutualsecuritiesfundsInparticularthisbenefitedmixedfunds(EUR78billion)equityfunds(EUR62billion)andmoney-marketfunds(EUR28billion)Investorsprimarilysoldtargetreturnfunds(EUR-11billion)andcapitalpreservationfunds(EUR-22billion)TheotherassetclassesintheareaofmutualsecuritiesfundstogetheraccountedfornetinflowsofEUR11billionOpen-endedreal-estatefundsachievednetsalesofEUR69billion(SourceBVIinvestmentstatisticsSeptember2020)

SectorsituationspecialfundsTheGermaninvestmentindustrygeneratednetinflowsofEUR574billionintheopen-endedspecialsecuritiesfundsunderitsmanagementin2020(asat30November2020)ThiswasdownonthepreviousyearrsquosfigureofEUR725billion(asat30November2019)Thevolumeundermanagementinopen-endedspecialsecuritiesfundstotalledEUR19702billionattheendofNovember2020andwasthereforeuponthepreviousyearrsquosfigureofEUR17573billion(asat30November2019)(sourceBVIstatistics)

Sectorsituationreal-estatefundsThemarketforGermanopen-endedreal-estatefundsgrewsignificantlyagaininthe2020financialyearAccordingtoBVIthe67open-endedreal-estatefunds(notincludingopen-endedspecialfunds)ontheGermanmarketreachedafundvolumeofEUR1173billionasofNovember2020TheproductsbeingactivelymarketedbroughttheindustryanettotalofEUR79billioninnewfundsbytheendofNovember2020ThisisproofpositiveofinvestorsrsquofundamentalconfidenceinthisassetclassForinformationpurposesitshouldbementionedthat15fundswithavolumeofEUR11billionarestillbeingclosed

II Specific business performance

1 Overview of assets under management and performance

11 FundbusinessassetsundermanagementThenumberofproductssetupbyormanagedbyUMHinvesteesunderfundmanagementmandatescameto1114in2020onaparwiththeprior-yearlevelof1116

ThevolumeofassetsundermanagementclimbedfromEUR3682billionasat31December2019 toEUR3859billionin2020anincreaseofEUR+177billionThisincreaseresultedfromthepositivenetinflowsandthepositiveperformanceontheinternationalcapitalmarkets

Overallthedevelopmentofassetsundermanagementin2020canbesummarisedasfollows

ThevolumeofmutualfundsincreasedbyEUR109billiontoEUR2210billion

ThevolumeofspecialfundsincreasedbyEUR85billiontoEUR1263billion

Thevolumeofotherformats(advisorymandatesandassetmanagement)lessoutsourcedmandateswasdownslightlyyear-on-yearatEUR387billion(previousyearEUR404billion)

VolumeofassetsundermanagementThevolumeofassetsundermanagementwithintheUnionInvestmentGroupwasasfollowsasattheendofthereportingperiod

31 Dec 2020 31 Dec 2019 Change

EUR thousand EUR thousand EUR thousand

Fund assets 347269669 327829763 19439906

Volume in other formats 53841955 54606199 -764244

ofwhichunit-linkedassetmanagement 3191083 2206442 984641

ofwhichinstitutionalassetmanagement 9069044 10349506 -1280462

ofwhichadvisoryandoutsourcing 41581827 42050250 -468423

Accounts managed by third parties -15177040 -14227571 -949469

Total 385934584 368208391 17726193

17


UndertheUMHbannertheUnionInvestmentGrouphadtotalassetsundermanagementofEUR385934584thousandasattheendofthereportingperiod(previousyearEUR368208391thousand)Thefundassetscompriseequityfundsfixed-incomefundsmoney-marketfundsmixedfundsothersecuritiesfundscapitalpreservationfundsrealestatefundsalternativeinvestmentfundsandhybridfundsissuedbytheUnionInvestmentGroup

TheUnionInvestmentGroupalsomanagesassetsaspartofitsunit-linkedassetmanagementandinstitutionalassetmanagementbusinessunderadvisoryandoutsourcingmandatesandprivatebankingThevolumeofthefundsissuedbytheUnionInvestmentGroupforwhichportfoliomanagementhasbeenoutsourcedisshownasadeductionThedefinitionofassetsundermanagementisbasedontheaggregatestatisticsoftheGermanInvestmentFundsAssociation(BVI)FrankfurtamMain

NetinflowstoassetsundermanagementThetablebelowgivesabreakdownofthenetinflowstoassetsundermanagementwithintheUnionInvestmentGroup



Net inflows (fund assets) 15787796 20754181 -4966385

Net inflows (other formats) -285051 -259475 -25576

ofwhichinstitutionalassetmanagement -933734 -457038 -476696

ofwhichadvisoryandoutsourcing -301648 -73291 -228357

Net change in accounts managed by third parties

-392004 -1122029 730025

Total 15110740 19372677 -4261937

NetinflowstoassetsundermanagementconstitutethebalanceofinflowstoandoutflowsfromtheproductformatsthatmakeupassetsundermanagementThisfigurewasEUR15110740thousandinthefinancialyear(previousyearEUR19372677thousand)

VolumeoffundassetsThevolumeoffundassetsoftheUnionInvestmentGroupwasasfollowsasattheendofthereportingperiod



Mutual funds 220988398 210056614 10931784

Equityfunds 59385668 56216994 3168674

Fixed-incomefunds 46256571 44605645 1650926

Money-marketfunds 828777 823633 5144

Mixedfunds 65178950 59300085 5878865

Othersecuritiesfunds 1539281 1710697 -171416

Pensionfunds ndash ndash ndash

Capitalpreservationfunds 3584370 5590752 -2006382

Open-endedreal-estatefunds 41231343 39288920 1942423

Alternativeinvestmentfunds 1640156 1653758 -13602

Hybridfunds 1343282 866130 477152

Special fund 126281271 117773149 8508122

Equityfunds 704307 631657 72650


Mixedfunds 81237722 76213675 5024047


Capitalpreservationfunds 15438610 14524845 913765

Specialreal-estatefunds 10623923 8479747 2144176

Alternativeinvestmentfunds 328329 267341 60988

Total 347269669 327829763 19439906

18


12 PerformanceofUnionInvestmentGroupfunds1

Despitethevolatiledevelopmentofthecapitalmarketsallmajorcompositesexceptforasymmetricdynamicproductsincreasedinabsolutetermsin2020IntherelativeanalysisapositivealphawasachievedacrosstheboardFortheyearasawholethevolume-weightedoutperformerratioacrossallfundswas876

Theequityfundsundermanagementincreasedbyanaverageof86inabsoluteterms58percentagepointsabovetheaverageoftheirbenchmarksThefundswithafocusonAsianequities(+164)NorthAmericanequities(+127)andGermanequities(+107)performedmostpositivelyTheglobalEuropeanandeurozoneequityfundsalsoachievedgains(10680and10respectively)WiththeexceptionofAktienEmergingMarketsallcompositesoutpershyformedtheirbenchmarksThealphawasparticularlylargeforAktienEuropa(+115percentagepoints)andAktienGlobal(+65percentagepoints)

Amongthefixed-incomefundsincreaseswerepostedbythecompositesRentenEURStaatsanleishyhen(+15)RentenEURAggregate(+22)andRentenEURUnternehmensanleihenIG(withnofixedtimetomaturity)(+38)Whereasthefirstofthesematchedthelevelofitsbenchmarkthelattertwooutperformedtheirbenchmarksby02and07percentagepointsrespectivelyAsaresultofsignificantlydecreasingriskpremiumsfundsfocussingonemergingmarketbondsinhardcurrencygainedvalueinbothabsoluteterms(+42)andrelativeterms(+03percentagepoints)Thankstotherecoveryoverthepastfewmonthsthemoney-marketandfixed-incomefundswitharemainingtermofuptooneyearalsoincreasedby09inabsolutetermsthusoutperformingtheirbenchmarkby12percentagepoints Themixedfundsgained40onaverage23percentagepointsmorethantheirbenchmarksAsymmetricdynamiccapitalpreservationproductslost13whichwas08percentagepointslessthantheirbenchmarksIntermsofabsolutereturnthefundswereupby28onaverage22percentagepointsmorethantheirmoney-marketbenchmarks

Real-estatefundsforretailinvestorsDuetothestrictlockdownconditionsduringtheCOVID-19pandemicandthedelaysinpayingoutgovernmentsupporttenantsndashparticularlyinthehotelandretailusagetypesndashfacedmajorchallengestopaytheirrentoverthecourseof2020TheseweremainlyalleviatedbyrentdeferralsortemporaryrentreductionsComparedtoFebruary2020theshareofoutstandingitemsfromtenantsincreasedbyafactoroffourtoaround11ofgrossannualtargetrentasoftheendoftheyearOverthecourseoftheyeartheimpactofthecrisiswasalsoreflectedinthepricedevelopmentofopen-endedreal-estatemutualfundsforretailinvestorswhoseaverageweightedperformancecontributionfellby139basispointsfrom265(startofyear)to126(endofyear)Thereal-estateportfolioofUnionInvestmentrsquosthreemutualfundsgrewbyatotalinvestmentvolumeofEUR1890millionin2020

Real-estatefundsforinstitutionalinvestorsTheconsequencesofthepandemicalsomadetheirmarkoninstitutionalfundswhichrecordedadeclineinperformanceof63basispointsfrom348to285(averageweightedperformancecontribution)AtthesametimehoweverinstitutionalbusinesswasexpandedbythreenewfundsandtheportfoliowasincreasedbyatotalinvestmentvolumeofEUR1543millionBusinesswithserviceassetmanagementmandateswasalsoexpandedfurtherin2020closingtheyearwithelevenfundsandassetsundermanagementofEUR8billion

SourceUnionInvestmentonthebasisofPEARLasat31December20202Performancesince1January2020roundingdifferencespossibleMoneymarketbonds0-1Moneymarketfundsandshort-datedbondfundscomparabletomoneymarketfunds(residualmaturityofsecuritieslt1year)BalancedMixedfundsMultiAssetfundsAsymmetric dynamicfundsIMMUNOampKONVEXOfundswithoutmaturitylimitation

SourcePFAGIPScompositesandoutperformerratios1Allthefollowingperformancefiguresarebasedonthegrossperformanceieonacost-adjustedbasisandrelateto2020

Unionfundscomparedtobenchmark(oneyear)2

(figuresin)

86funds EUR544billion

Equityfunds

58

86

28


Fixedshyincome funds

04

30

26


Money marketbonds

0ndash112

09

-03


Mixedfunds

23

40

17


Asymmetric dynamic products

08

-13

-21

Composite(gross) Benchmark(marketdevelopment) Active return

19


13Awardsrankingsandratings1

Forthe18thtimeinarowtherenownedGermanbusinessmagazineCapitalawardedUnionInvestmentthehighestratingoffivestarsin2020ndashitistheonlyinvestmentcompanytoachievethisThecompanyalsoreceivedtwenty2020eurouroFundAwardsfromtheeurourofinancialmagazineandtwo2020RefinitivLipperFundAwardsforindividualfundsInNovemberUnionInvestmentwasrecognisedasaGermanFundChampion2021byf-fexampfinanzennetinthecategoriesofESGsustainabilityequitiesandmixedfunds

IntherankingofassetmanagementcompaniesperformedbyScopeasat31December2020UnionInvestmentwasrankedsecondwitharatioof520offundswithatopratingmakingitthebestGermanassetmanagementcompany(Deka3rdplace486DWS13thplace410AllianzGlobalInvestors23rdplace336)

IntherankingsissuedbytheMorningstarratingsagencyasat31December2020thatcompareUnion Investment against its main competitors in Germany Union Investment was ranked third overonethreeandfiveyearsTheproportionoffundsintheupperhalfofeachpeergroupwas516overaone-yearperiodand525and506respectivelyoverthelongeranalysisperiods

2 Development in sales and fund assets

21UnionInvestmentGroupsalesandfundassets2

TheUnionInvestmentGrouphadtotalassetsundermanagementofEUR3859billionasat31December2020(2019EUR3682billion)AsattheendofDecember2020itachievedamarketshareof134oftheassetsundermanagementacrossthesectoraccordingtotheinvestmentstatisticsoftheGermanInvestmentFundsAssociation(BVI)(asatDecember2019147)thisequatestosecondplaceoverallinthemarket(2019secondplace)ItsassetsweredistributedacrossthetwobusinessdivisionsofRetailClientsandInstitutionalClients

RetailinvestorsndashdevelopmentinsalesandassetsAllfundsundertheUnionInvestmentbrandareofferedtoretailclientsexclusivelyviaourpartnerbanksinthecooperativefinancialnetworkThisapproachdistinguishesUnionInvestmentfrommostofitscompetitors

HistoricallythisstrategyoffocusingpurelyontheGenossenschaftlicheFinanzGruppeVolksbankenRaiffeisenbankencooperativefinancialnetworkhasformedthebasisforthesuccessfulperformanceoftheUnionInvestmentGroupTheclosecooperationwithintheGenossenschaftlicheFinanzGruppeagainproveditsworthin2020

AtEUR286billiongrosssalesinretailclientbusinesswereonceagainhighin2020(2019EUR277billion)NetinflowsamountedtoEUR88billion(2019EUR81billion)Thenetinflowswereaimedattheassetclassesofmixedfundsreal-estatefundsfixed-incomefundsandequityfundsinparticularBycontrastclientswithdrewfundsfromcapitalpreservationfunds

Thevolumeofassetsundermanagementinbusinesswithretailclientsincreasedbyaround8toEUR1738billionasat31December2020(2019EUR1604billion)

AccordingtotheinvestmentstatisticsoftheGermanInvestmentFundsAssociation(BVI)theUnionInvestmentGrouprsquosshareofthemanagedmutualfundsmarketwas216inDecember2020(2019211)UnionInvestmentthereforeremainedthelargestmanagerofmutualfundsinGermany(2019largest)

InstitutionalinvestorsndashdevelopmentinsalesandassetsThevolumeofassetsundermanagementforinstitutionalinvestorsgrewtoEUR2121billionin2020(2019EUR2078billion)TheassetsinspecialfundsincludedthereinincreasedtoEUR1131billion(2019EUR1064billion)Assetsundermanagementinotherinstitutionalbusinessformats(mutualfundsadvisoryandinstitutionalassetmanagement)amountedtoEUR990billion(2019EUR1014billion)

1SourcesPFAcompetitioncomparisonsforMorningstarandScopeUnionRatingPortal2SourcesInvestmentstatisticsfromGermanInvestmentFundsAssociationasat31December2020andasat31December2019 internalcalculations

Assets under management and net sales in the Retail Clients segment(inEURbillion)

Assets under management and net sales in the Institutional Clients segment(inEURbillion)

AuM Netsales

2019 20192020 2020

1604

2078

1738

2121

81 113

+8

+2

88 63

20


In2020institutionalbusinessgeneratednetinflowsofEUR63billion(2019EUR113billion)Netsaleswerefocussedonspecialfunds

AccordingtotheBVIinvestmentstatisticstheUnionInvestmentGrouprsquosshareofthespecialfundsmarketwas126inDecember2020(2019125)Thegroupisthereforestillthesecond-largestmanagerofspecialfundsinGermany

22Custodybusinessandfundbrokerage

Asattheendof2020theUnionInvestmentGroupmanagedmorethan48millionclientcustodyaccountswithportfoliosofthegrouprsquosownandthird-partyinvestmentfundsTheportfoliovolumewasincreasedbyEUR118billionfromEUR1441billionintotaltoEUR1559billion

Thenumberofmanagedcustodyaccountswiththird-partyfunds(fundsfromassetmanagementcompaniesoutsidethegroup)wasaround439000asattheendoftheperiodunderreview(2019387000custodyaccounts)Thevolumeofassetsinvestedinthird-partyfundswasEUR92billionattheendof2020(2019EUR79billion)

UnionInvestmentServiceBankAGhandledatotalofaround815millioncustomertransactionsin2020whichcanbebrokendownasfollowsbull 640millionsavingsplanswithdrawalplansemployer-fundedcapitalformationschemesetcbull 148millionincomedistributionsreinvestmentandcustodyaccountfeesbull 25milliononlinetransactionsbull 03millionmanualoffline-onlyspecialpostings

22milliontransactionswereentereddirectlybytheendinvestorandbanksusingtheonlineserviceAutomatedprocessingaccountsfor993ofthetransactionsprocessed(previousyear992)stilltheoptimumlevelfromabusinessperspective

Thefundbrokeragebusinessprocessedatotalofaround05millionattraxSAclientorderswithavolumeofapproximatelyEUR520billionintheyearunderreview

01millionordersworthEUR64billionwerepostedinUnionInvestmentGroupfunds

ThevolumeofassetsheldincustodyforattraxclientswasEUR705billionasattheendoftheyearunderreview(previousyearEUR697billion)EUR252billionofthiswasheldforcooperashytivepartnerbanks(previousyearEUR228billion)andEUR453billionforinstitutionalclients(previousyearEUR469billion)Thevolumeoffeesandcommissionpaidastrailcommissionin2020amountedtoapproximatelyEUR1349million(previousyearEUR1343million)

Thefundbrokeragebusinessactivelysupported164cooperativebankswhilethenumberofinstitutionalclientssupportedchangedfrom141to44asattheendof2020(changeinthemethodforcountingfundsoffunds)

III Business environment

2020wasdominatedbytheeffectsofthenewSars-CoV-2virus(COVID-19)DuetotherapidglobalspreadanditshealtheffectstheWorldHealthOrganisationofficiallydeclaredtheoutbreaktobeapandemicThemeasurestocontainCOVID-19ledtoamajoreconomicslowdownworldwideThisalsoaffectedtoeurozoneTocountertheresultingrisksforpricestabilitythemonetarypolicytransmissionmechanismandeconomicdevelopmentsintheeurozonetheECBGoverningCouncilresolvedon18March2020toestablishanewtemporaryPandemicEmergencyPurchaseProgramme(PEPP)withavolumeofEUR750billion

ThecoronavirusemergencypurchaseprogrammeforbondswasincreasedbyEUR600billionon4June2020andanotherEUR500billionon10December2020toatotalofEUR185trillionInadditionthetimeframefornetpurchasesunderthePEPPwasextendeduntilatleasttheendofMarch2022PurchasesaretobecontinueduntiltheCOVID-19pandemicisover

Market sharesAssets under Management

SourceInvestmentstatisticsoftheGermanInvestmentandAssetManagement(BVI)asatDecember2020

134

216

126

17

Union Investment Competitors

Mutual funds

Special funds

Other formats

21


Due to the continuing pandemic period the ECB additionally adopted several other resolutions on10December2020tosustainablybolstertheeconomyensuremedium-termpricestabilityandsupporttheflowofcredittothedifferentsectorsoftheeconomyAmongothermeasures

bullFouradditionalPandemicEmergencyLonger-TermRefinancingOperations(PELTROs)aretobeofferedin2021PELTROsareimplementedasfixed-ratetenderswithfullallocationTheyservetosafeguardliquidityinordertosupporttheliquidityconditionsintheeurozoneandhelpensurethatthemoneymarketsworkproperly

bull TheexistingAssetPurchaseProgramme(APP)willbecontinuedinamonthlyamountofEUR20billionTheECBwillthuspurchasenewlyissuedbondsFurthermoretheprincipalrepaymentsfromsecuritiespurchasedundertheAPPcanbeusedtopurchasesuchsecuritiesinordertomaintainfavourableliquidityconditionsandanampledegreeofmonetaryaccommodation

During2020theECBlefttheinterestratesforthemainrefinancingoperationsthemarginallendingfacilityandthedepositfacilityunchangedat000025and-050respectivelyKeyinterestratesareexpectedtoremainatthisleveloralowerleveluntiltheinflationoutlookhasrobustlysettledatalevelsufficientlyclosetobutbelow2andthisindicatesthepaceofinflation

Accordingtothe2020AnnualEconomicReportpresentedbytheGermanFederalMinistryforEconomicAffairsandEnergy(BMWi)inJanuary2020economicmomentuminGermanywasexpectedtopickupoverthecourseoftheyearwiththeeffectthata11increaseinprice-adshyjustedgrossdomesticproductwasanticipatedThisforecastwasadjustedduetotheeconomiceffectsoftheCOVID-19pandemicAccordingtoanassessmentforGermanyin2020thatwaspresentedinNovembertheGermanCouncilofEconomicExpertsanticipatesadeclineinrealgrossdomesticproductof51followedbygrowthof37in2021InitsautumnforecasttheEuropeanCommissionexpectedtheeurozoneeconomytocontractby78in2020Inviewoftheongoingepidemiologicalsituationgrowthforecastsareveryuncertainandriskyoverall

UnionInvestmenthelpsshapetheconditionsforinvestmentfundsatbothnationalandinternationallevelAtEuropeanlevelUnionInvestmentisinvolvedinawidevarietyofworkinggroupssetupby theEuropeanFundandAssetManagementAssociation(EFAMA)AtnationallevelUnionInvestmentparticipatesinthecommitteesoftheGermanInvestmentFundsAssociation(BVI)andtheNationalAssociationofGermanCooperativeBanks(BVR)UnionInvestmenthasbeenprovidingthePresidentoftheBVIforatwo-yearperiodsinceSeptember2020intheformofAlexanderSchindleramemberoftheBoardofManagingDirectorsofUnionAssetManagementHoldingAGInadditionsuccessfulcontinuous dialogue is maintained with other European and international regulatory authorities and withrepresentativesfromregionalandEuropeanpolitics

Tax regulations InGermanySections138detseqoftheGermanFiscalCodeenteredintoforceWiththislegalregulationtheEuropeanAmendingDirective2018822EU(DAC6)onthenewreportingobligashytionformodelcross-bordertaxarrangementswasimplementedTheoptionsincegrantedunderEUlawtopostponeitsentryintoforcebyuptosixmonthswasnotexercisedFrom1July2020anycross-bordertaxarrangementthatmeetscertaincriteriamustthereforebereportedtothefinancialauthoritieswithin30daysThereportingobligationappliestosuchcross-bordertax

arrangementsforwhichthefirststeptowardsimplementationwasmadeafter24June2018Theintermediarythatmarketsthecross-bordertaxarrangementdesignsitforthirdpartiesorganisesitmakesitavailableforuseormanagesitsuseissubjecttothereportingobligationReportingobligationscanalsoapplytotheuserofthetaxarrangementAnexplanatorycircularfromtheGermanFederalMinistryofFinanceisexpectedin2021

ThedraftbillforthetranspositionofEUDirective20161164of12July2016(Anti-TaxAvoidanceDirectiveATAD)intonationallawthatwasfirstintroducedinmid-December2019hasnotyetstartedthelegislativeprocedureandwasstillbeingrevisedasofNovember2020InparticulartherelationshipbetweentaxationaccordingtotheGermanInvestmentTaxActandaccordingtotheGermanExternalTaxRelationsActisexpectedtobeadjustedfrom1January2020onward

RequirementsoftheBenchmarkRegulation TheparticularaimofEuropeanRegulation(EU)20161011onindicesusedasbenchmarksinfinancialinstrumentsandfinancialcontractsortomeasuretheperformanceofinvestmentfunds(knownastheBenchmarkRegulation)istoensurethatbenchmarkscreatedorusedwithinthe EUarerobustreliablerepresentativeandsuitablefortheirintendedpurposeInthiscontextabenchmarkisunderstoodtomeananindexoranindicatorforpricingfinancialinstrumentsandfinancialcontractsormeasuringtheperformanceofinvestmentfunds

From1January2020supervisedentitiescanuseabenchmarkfromoneofthe27EuropeanUnionmemberstatesoracombinationofbenchmarksintheEUonlyifthebenchmarkisprovidedbyanadministratorandenteredinapublicregisterkeptbytheEuropeanSecuritiesandMarketsAuthority(ESMA)orthebenchmarkisenteredaccordingly

ForldquocriticalbenchmarksrdquomeaninginparticularwidelyusedinterestratessuchasLIBOREURIBORandEONIAtheEuropeanCouncilandtheEuropeanParliamenthavedecidedtoextendthetransitionperiodforregistrationuntiltheendof2021TherecognitiondeadlineforbenchmarksprovidedbyanadministratorlocatedinathirdcountryandalreadyusedwithintheEUasareferenceforfinancialinstrumentsandfinancialcontractsortomeasuretheperformanceofinvestmentfundshasbeenextendeduntiltheendof2023InadditiontheEuropeanCommissionisgiventhemandatetoextendthisdeadlineforfurtherrecognitionifnecessaryUseoftheLIBORbasedontheUSdollarhasbeenextendeduntil30June2023withtheexceptionofthe1-weekand2-monthmaturitiesTheEuroShort-TermRate(euroSTR)isusedintheUnionInvestmentGroupasthesuccessortotheEONIAbenchshymarkrateTheeuroSTRisdeterminedbytheEuropeanCentralBankandbasedontheEurosystemrsquosmoney-marketstatistics

Promotingasustainablefinancialsystem

InitiallegislativeproposalsfortheldquoFinancingSustainableGrowthrdquoactionplantopromoteasustainablefinancialsystemintheEUwerepresentedbytheEuropeanCommissionin2018OnthisbasisEuropeanRegulation20192088onsustainability-relateddisclosureobligations inthefinancialservicessector(DisclosureRegulation)waspublishedintheOfficialJournaloftheEuropeanUnionon9December2019andcameintoforceon10March2021WiththisRegulationinformationasymmetriesinrelationtopromotingenvironmentalandsocialfeatures

22


includingsustainabilityrisksandtakingaccountofnegativesustainabilityimpactsaretobeeliminatedFinancialmarketparticipantsandfinancialadvisorsarethereforerequiredtoprovidecertainpre-contractualinformationandongoingdisclosurestoendinvestors

FormanyoftheinformationrequirementstheEuropeansupervisoryauthoritiescanissuetechnicalregulationstandardsthatfleshouttheserequirementsThesestandardsthedraftsofwhichhavealreadybeenconsultedonbytheJointCommitteeoftheEuropeanSupervisoryAuthoritieshadnotyetbeenfinalisedasofmid-December2020Theywillthereforecomeintoforcenotasat10March2021butatalaterdatepossibly1January2022

On22June2020theEURegulation2020852(TaxonomyRegulation)wasalsopublishedAlthoughtheTaxonomyRegulationincludescriteriafordeterminingwhetheraneconomicactivityistobeclassifiedasenvironmentallysustainableitdoesnotincludeanyspecificinvestmentrequirementsandalsodoesnotrepresentastandardforsustainableinvestmentsInsteaditaimstoestablishtransparencyandauniformclassificationsystemforsustainableeconomicactivitieswhichareintendedtohaveapositiveimpactontheenvironmentalgoalsintheEU

FurthermoretheEuropeanCommissionhasputforwarditsreviseddraftofadelegatedactonMiFIDIIregardingmandatoryascertainmentofsustainabilitypreferencesAfinalresolutiononthishadnotyetbeenadoptedbymid-December2020Itisexpectedthatclientsrsquosustainabilitypreferencesmustbeascertainedwheninvestmentadviceisprovidedfromspring2022

Sustainabilityrequirements

On30October2020theEuropeanBankingAuthority(EBA)publishedadiscussionpaperonthemanagementandregulationofESGrisksforbanksThepaperpresentedquantitativeandqualitashytiveindicatorsandmethodsformeasuringESGrisksTheresultingregulationsarealsoexpectedtoaffectassetmanagementcompanies

WithregardtotheinformationsheetonhandlingsustainabilityrisksthatwaspublishedbyBaFinon20December2019animplementationguidewasdevelopedintheldquoSustainableFinancerdquoworkinggroupoftheBVRinNovember2020Usingthisimplementationguidethegoodpracticeapproachshyesformulatedbythesupervisoryauthoritycanbeimplementedbythesupervisedcompaniesintheareaofsustainabilityrisks

Preventionofmoneylaundering

The5thEUMoneyLaunderingDirectivewasimplementedinGermanlawasat1January2020InparticularthisinvolvedamendingtheGermanMoneyLaunderingActaccordinglyAswellasexpandingthegroupofpartiessubjecttotheobligationstheapplicableduediligenceobligashytionsweresteppedupfurtherTheimplementationrequirementswereidentifiedbytheUnionInvestmentGrouprsquosmoneylaunderingofficerandaprojectplanforimplementationwasdevelopedenablingtheimplementationandadjustmentofprocessesandguidelinestotakeplaceonscheduleTherequirementtotakeaccountofthetransparencyregisterwhenimplementingduediligenceobligationsundermoneylaunderinglawwasestablished

AmendmentofInvestmentServicesDirectiveandMiFIDIIQuickFix

FollowingtheimplementationofthesecondEUDirectiveonMarketsinFinancialInstruments(Directive201465EUndashMiFIDII)inGermanlawatthebeginningof2018theprocessofestablishshyingthelegislationatbothEUandnationallevelisnotyetentirelycompleteTheESMAguidelinesoncertainaspectsoftheMiFIDIIsuitabilityrequirements(ESMA35-43-1163DE)whichwereissuedin2018wereincorporatedintheMinimumRequirementsforCompliance(MaComp)inthemiddleoftheyearAlongsidethisBaFinandESMAconductedseveralmarketstudiesatbankstogatherdataontheimplementationstatusandeffectivenessofthenewMiFIDIIregulationsOthermeasuresrelatedtodetailssuchasrecordingtelephonecallsTothisendBaFinaccordinglyaddedtotheFAQsontheldquoMiFIDIIrulesofconductinaccordancewithsections63etseqWpHGrdquoinJune2020TheseandothermeasuresweremanagedcentrallyfortheGenossenschaftlicheFinanzGruppeviathestillactiveworkpackagesintheBVRprojectonMiFIDIIwiththeinvolveshymentofUnionInvestment

AtEUleveltheEuropeanCommissionpublishedseveralproposalsinJuly2020fortherevisionofvariousEUregulationsatshortnoticeinordertocountertheeconomiceffectsofthecoronaviruscrisis(ldquoEUCapitalMarketsRecoveryPackagerdquo)ThesealsoincludedanEUAmendingDirectiveinrelationtotheMiFIDIIDirectivewhoseimplementationatnationallevelisexpectedtoberequiredinlate2021orearly2022InaccordancewithArticle24(5a)ofthisAmendingDirectiveelectronicformatsaretobethenewstandardforcustomerinformationinfutureandaretobetransmittedonadurablemedium(obligatorycustomerinformation)PaperformistobeusedonlyifthecustomerspecificallyrequestsitInthiscasethecustomerinformationistobeprovidedfreeofchargeAsthisregulationisexpectedtobringextensivechangesfortheUnionInvestmentGroupanewprojecthasbeenlaunchedforthis

TheEUlegislatorsarealsoplanningtomakefurtheroptimisationstotheMiFIDIIDirectiveInFebruary2020variousquestionswithregardtoadjustingcertainelementsofcustomerprotecshytionndashsuchascostinformationtheclassificationofcustomergroupsandthetargetmarketprovisionsndashwereputforwardfordiscussionaspartofapublicconsultationbytheEuropeanCommissionSomeofthefindingshavealreadybeentakenintoaccountintheMiFIDIIQuickFixHoweverfurtherchangesareanticipatedinthefollowingyearsTheaboveconsultationwascloselymonitoredbyUnionInvestmentincooperationwithBVRBVIandEFAMAandthegrouppresenteditsownstatementonthemattertotheEuropeanCommission

EuropeanCommissionconsultationonreviewofAIFMDirective

InOctober2020theEuropeanCommissionpublishedaconsultationonthereviewoftheAIFMDirectiveTheconsultationcomprises102questionsthatprimarilydealwiththetopicsofdifferentishyatingbetweensmallandprofessionalinvestorsrulesfordepositoriesincludingconsiderationsregardinganEUpassportfordepositoriesvaluationissuesandreportingInadditionitraisesthequestionofwhethertheUCITSDirectiveandtheAIFMDirectiveshouldbecombinedas oneuniformregulationTheEuropeanCommissionhassetadeadlineof29January2021foransweringthesequestionsUnionInvestmentisparticipatingintheconsultationviatheBVIandtheEFAMA

23


DraftbillonstrengtheningGermanyasafundlocation

InDecember2020theGermanFederalMinistryofFinancepublishedadraftlawtostrengthenGermanyasafundlocationThislawisintendedtoremoveexistingbarriersandmakeGermanymorecompetitiveInadditionDirective(EU)20191160inrelationtocross-borderdistributionistherebytobeimplementedinnationallaw

ThedraftbillprovidesfortheremovalofseveralwrittenformrequirementsbothbetweentheassetmanagementcompanyandBaFinandbetweentheassetmanagementcompanyanditsinvestorsInadditionopen-endedinfrastructurefundsandclosed-endmaster-feederstructuresaretobeintroducedAspartoftheimplementationoftheEUdirectiveoncross-borderdistributionldquopre-marketingrdquoisintroducediethedirectorindirectprovisionofinformationorcommunicationsoninvestmentstrategiesorconceptstopotentialprofessionalorsemi-professionalinvestorsdomiciledinGermanyoranotherEUmemberstatebyoronbehalfofanAIFmanagementcompany

RequirementsoftheShareholderRightsDirective

TheGermanActontheImplementationoftheSecondShareholderRightsDirective(ARUGII-(EU)2017828)cameintoforceon1January2020Overallthislawaimstofurtherimproveshareholdshyerengagementatlistedcompaniesandtomakeiteasiertoprovidecross-borderinformationandexerciseshareholderrightsItparticularlyincludesincreasedtransparencyobligationsforinstitutionalinvestorsassetmanagersandvotingrightsadvisorsUnionInvestmentimplementedthenewrequirementsinfullandonschedule

Requirementsforinformationtechnologyatassetmanagementcompanies

Inthefourthquarterof2019therewasaregulatorypublicationontherequirementsforITatassetmanagementcompaniesToidentifypotentialneedforactionagapanalysisandsubsequentlyanevidence-basedreviewofselectedtopicswereconductedin2020Identifieddeviationsinrelationtoinformationsecurityarecoveredbyanexistingprojectandareintendedtoberectifiedbytheendof2023

In2021theamendmentoftheGermanITSecurityActforoperatorsofcriticalinfrastructureisanticipatedBasedonthecurrentdraftlegislationthiswouldbeapplicabletotheUnionInvestmentGroupduetochangedcriteriaresultingincorrespondingadditionalexpenses

RequirementsforITatbanks

AnamendmentoftheregulatoryrequirementsforITtobefollowedbybanksandfinancialservicesprovidersisanticipatedin2021BaFinhascompletedapublicconsultationonthisBasedonthecurrent status additions to the content and material expansions are expected in its implementation whichwillresultinincreaseddocumentationwork

IV Research and development

1 Retail Clients

In2020productpolicyintheRetailClientssegmentcontinuestofocusprimarilyontheclientsrsquoneedsBusinessdevelopmentcontinuestofocusoninvestingandoptimisingassetsold-ageprovisionandsavingsSustainabilitylikewiseplaysamajorroleinbusinessdevelopmentProductpolicyissuesforretailbusinessarehandledcollectivelybytheProductManagementdepartmentofUnionInvestmentPrivatfondsGmbH(UIP)alsocomprisingtheaffiliatesrsquofundsandcooperativebusinesswithR+V

Developments in the product range

DevelopmentofnewlaunchesOn31January2020theUniNordamerikaXSAfund(includingaunitclasswithnofront-endfee)waslaunchedThisequityfundmainlyinvestsinindividualstocksfromtheNorthAmericansmallandmid-capsegmentThefocusiscurrentlyonequitiesandsimilarsecuritiesfromissuersdomiciledintheUnitedStatesofAmericaorinCanadawithlowmarketcapitalisation

Alsoasat31January2020theUniAusschuumlttungAfundwasexpandedwithaconservativeversionTheUniAusschuumlttungKonservativAfund(includingaunitclasswithnofront-endfee)focusesonthegenerationofregularincomethroughtheflexiblecombinationofvariousassetclassesandtheuseofdifferentdistributionsourcesTheconservativemixedfundinvestsinglobalbondandequitymarkets

Asat1April2020thesustainableproductrangewasexpandedwithourfirstsustainablefixed-incomefundFollowingthisfundlaunchinvestorshavetheoptionofchoosingasustainablefund inallofthemainassetclassesUniNachhaltigUnternehmensanleihenA(includingaunitclasswithnofront-endfee)isafixed-incomefundthatinvestsgloballywithafocusoncorporatebondsWhenselectingissuersenvironmentalsocialandethicalcriteriaaretakenintoconsideration

AsattheendofDecember2020thesefundstooknetinflowsofjustunderEUR106millionaltogetherAsat31December2020thefundvolumeamountedtoEUR1097millionwith2621savingsplansconcludedforthefundstodate

Inthefirsthalfof2020fourotherfunds(UniMultiAssetChancel-lllNachhaltigandUniMultishyAssetExklusivNachhaltig)werealsolaunchedthatareintendedtobeusedasacomponentoftheVermoumlgenPlusNachhaltigfinancialportfoliomanagementInadditiontheUniEuropaRenta-net-Aunitclasswithnofront-endfeeswaslaunchedinLuxembourgasat1July2020AtthesametimeasthelaunchtheGermanfundwiththesamenamewasmergedwiththenewunitclass

24


FinancialportfoliomanagementThedigitalinvestmentassistantMeinInvesthasbeenavailableasawhitelabelsolutionforalldistributionpartnerssinceApril2018AsastandardisedsolutionforthemanagementoffinancialportfoliosMeinInvestoffersthreeportfolioswithdifferentriskorientationsIntheseportfoliosUnionInvestmentfundsareusedandthird-partyfunds(ETFs)arealsoaddedinselectedassetclassesAsatthereportingdateof31December2020378bankshadactivelyintroducedMeinInvestAtotalof38049custodyaccountshadbeenconcludedthroughthesebanksatthattime86ofwhichwereassociatedwithasavingsplanTheinvestmentvolumecametoEUR1128million

2019sawthemarketlaunchofVermoumlgenPlusafund-basedfinancialportfoliomanagementsolutiondevelopedforthepremiumsegmentofcustomersrequiringahighlevelofsupportandofferedviabanksPersonaladviceforthecustomerissupportedwithmoderntechnologyfortheadvisorVermoumlgenPlusisbasedonanactiveportfoliomanagementapproachMulti-assetportfoliosmanagedexclusivelyforVermoumlgenPlusincombinationwiththird-partyfundsandthetargeteduseofETFsarekeyfeaturesofthisassetmanagementAsatthereportingdateof31December2020213bankswereactivatedforVermoumlgenPlusAtotalof39731VermoumlgenPluscustodyaccountshadbeenopenedsinceitsmarketlaunchandtheinvestmentvolumeasoftheendoftheyearcametoEUR7576millionInadditionthe12-monthsavingsvolumeinVermoumlgenPlusamountedtoapproximatelyEUR1066million

FortheMeinInvestandVermoumlgenPlusfinancialportfoliomanagementsolutionssustainableinvestmentstrategieswillalsobeofferedstartingfromJanuary2021FromthenonthebankswillalsobeabletoofferthreesustainableportfoliosperproductinadditiontotheexistingconventionalinvestmentstrategiesThenecessaryexpansionofthecooperationagreementwiththebanksiscurrentlybeingimplemented

Fund measuresIntermsoffundmeasureseightstaticguaranteefundswererepaidasscheduledoverthecourseof2020Inadditionfourfixed-termbondfundswereclosedattheendoftheirterms

ThemergerofthreefundsenablestheinvestorstoparticipateinlotsizeadvantagesTheUniEuroRshyenta5JfundwasmergedwiththeUniEuroRentaCorporatesAfundInadditiontheadvantagesofmergingtheUniOptimafundwiththeUniEuroKapitalfundoutweighedthedisadvantagesTheGermanfundUniEuropaRenta-net-wasmergedwiththenewunitclasswithnofront-endfeesundertheLuxembourgfundUniEuropaRenta

IncooperationwithPortfolioManagementastrategicreviewoftheproductrangewasconductshyedThegoalwasfirstlytotakeaccountofthechangesonthecapitalmarketandintheregulatoryenvironment and secondly to ensure that the product range will also continue to comprise competitiveproductswithincomepotentialandanattractivepeergroupplacementforourinvestorsTheproductconceptsfocusonincreaseduseofexistingdegreesoffreedomawiderdistributionacrossdifferentbondsegmentsandinternationalisationoftheinvestmentuniversetomakethebestpossibleuseofdifferentyieldsourcesInthereviewitwasensuredthatthemeasurestakenoptimisetheproductsrsquoriskrewardprofileonalong-termbasisandprovideaclearerpositioningAspartofthereviewtheUniEuroAspirantandUniWirtschaftsshyAspirantfundsweregivenaclearfocusAsat1April2020theUniEuroAspirantfundwas

clearlypositionedinthedirectionofEasternEuropeandwasrenamedinthiscontext(UniRentaOsteuropa)AsatthesamedatetheinvestmentuniverseoftheformerUniWirtschaftsAspirantwasfocusedongovernmentandcorporatebondsfromemerging-marketissuersinlocalcurrenshyciesThefundwasrenamedUniRentaEmergingMarketsA

ThereviewalsoledtoaconversionofthelegalbasisfortheGenoAS1fundfromapensionfundtoaUCITSfundandanassociatedchangeinthefundrsquosnametoUniKlassikMix

2 Institutional investors

Inthecompany14newspecialAIFstwonewunitcertificateclassesforspecialAIFsandeightnewadvisoryorinsourcingmandates(alsoincludingmandateconditionsunderwhichaUINspecialfundwastransferredtoamasterassetmanagementcompanybutUnioncouldcontinueitsmanagement)weredevelopedandlaunchedortransferredtomanagementfunctionsin2020Therewerealsothreechangesintheassetmanagementcompanyforinsourcingmanshydates(iethemandatewasalreadymanagedbyUINbutthecontracthadtobedrawnupagainbecausetheinvestorchangedassetmanagementcompany)ThecompanycontinuestoexhibitsteadygrowthinadvisoryandinsourcingmandatesTothisenditalreadyprovidesportfoliomanagementservicesfornumerousmasterassetmanagementcompaniesandclientsFortheacquisitionofportfoliomanagementservicesinthecontextofoutsourcingmandatesandtheassociatedserviceseffectiveandefficientcontrolprocesseswerecertifiedbyanauditfirmwhichconfirmstheconstantcompliancewiththecompanyrsquoshighqualitystandards(auditinaccordancewithISAE3402)

InviewofthedifficultenvironmenttheInstitutionalClientssegmentofUnionInvestmentwassuccessfulinthepastfinancialyearItsnetsales(includingadvisoryandinstitutionalassetmanageshymentmandates)amountedtoEUR63billion(comparedwithEUR113billioninthepreviousyear)Itgainedatotalof36newclientsinthereportingyear(201970)35ofwhichcamefromoutsidethecooperativesectorNetsalesgeneratedbynewclientsamountedtoEUR14billion

Giventhesignificantreductioninriskbudgetsthekeychallengeforinstitutionalinvestorsistoachievetheminimumrequiredratesofreturninarisk-controlledmannerinasustainedlow-intershyestenvironmentThishasaffectedassetallocationAsanalternativetothepreviouslydominanteurozonegovernmentbondsinvestorsarelookingforinvestmentswithhigheryields

QuoniamAssetManagementGmbHFrankfurtamMain(Quoniam)whichispartoftheUnionInvestmentGrouppostedanetoutflowintheyearunderreviewNeverthelessitscustomerbasewasstrengthenedbyninenewclientswithadditionalassetsundermanagementofEUR09billionQuoniamoperatesasaspecialistinquantitativeinvestmentstrategiesacrossallassetclassesThecompanycurrentlymanagesassetsofEUR266billionin135institutionalportfolios

BEAUnionInvestmentManagementLimitedHongKongthejointventuresetupwithHongKong-basedTheBankofEastAsiaLimitedgeneratednetsalesofaroundEUR06billion(notincludingfundsoffunds)andthereforeremainssuccessfulItsassetsundermanagementroseby68comparedwith2019totheequivalentofaroundEUR110billion

25


Real-estatefundsforretailinvestors

Individualfundproductsandadditionalinvestmentpotentialfortheexistingfundbusinessonthemarketwereestablishedin2020ForexamplenewsourcingformatssuchasldquoCatchoftheDayrdquoandldquoManagetoCorerdquoweredevelopedandintegratedintheproductrange

WiththenewproductformatldquoCatchoftheDayrdquonewindividualreal-estatesolutionsarecreatedbytakingadvantageofmarketopportunitiesThesearepreferablylarge-volumeoff-marketdealsorpropertyportfolios(usuallyoverEUR400million)ExistingUnionInvestmentfundscanalsobenefitbyinvestingintheCatchoftheDayproductandgainexclusiveaccesstosub-portfoliosandorindividualpropertiesaspartoftheproductstructuringByusingstructuringoptionsinatargetedwaycombinedwithtrendsettingpropertyandportfoliostrategiesanindividualfundproductforinstitutionalinvestorswascreated

ldquoManagetoCorerdquoreferstoinvestmentsinundervaluedexistingbuildingsorspeculativeprojectdevelopmentswithattractiveaddedvaluepotentialThegoalistodevelopandrepositionpropershytiesinordertomaximiseincomeandgenerateanattractivepropertyperformanceIntheinitialphasethefocusisonofficebuildingsinGermanyandEuropeThetargetedinvestmentvolumeperprojectismorethanEUR20million

DuetothegrowingregulatorypressureatpropertyandproductlevelthetopicofsustainabilityisplayinganincreasinglyimportantroleInconnectionwiththeParis2015climategoalsthepropertyportfolioinGermanyistobealmostclimate-neutralby2050AtnationallevelinparticularspecificlegalrequirementsareincreasingrapidlyandwillhavedirecteffectsontheexistingpropertyportfolioandnewpurchasesUnionInvestmenthasdevelopedaldquoManagetoGreenrdquostrategytopreparethepropertyportfolioforfuturechallengesandachievethegoalofclimateneutralityby2050ThedegreeofprogressinitsimplementationisclearlyshownbytheldquoatmosphererdquolabeldevelopedbytheRealEstatesegmentAkeyindicatorshowsthedegreeofcompletionofthestrategyandthatoftheclimatepathandthusofregulationforpropertiesandentireportfoliosThebiggestchallengeatpresentistheEUActionPlanwhichcoversthetopicsoftaxonomysustainabilitypreferencequeriesanddisclosureobligationsThetaxonomyestablishesauniformdefinitionofsustainablefinancialproductsinordertoavoidgreenwashingandclearlydistinguishsustainabilityIntheascertainmentofsustainabilitypreferencesclientswillinfuturebeaskedintheconsultingprocesswhetherasustainableinvestment(asdefinedbythetaxonomy)isdesiredAspartofthedisclosureobligationsapplicablefrom2021financialservicesproviderswillalsoberequiredtoreportonsustainabilityrisksandindicatetherisksofnon-sustainablefinancialproductsInadditiontosomebuildingsthatcurrentlymeetthegenerallyapplicableregulatorytargetsfor2050additionalexpensesatpropertylevelandorportfolioshiftsareexpectedtobenecessarytoachievetheclimatetargetsoverall

3 2021 outlook

31RetailClients

In addition to regularly adjusting its product range Union Investment also updates its existing productsAgainstabackdropoflegislativechangesandpersistentlylowinterestratestheRetailClientssegmentisendeavouringtoofferinvestorsfundsandsolutionsthatreflectthecurrentmarketenvironmentandthatmakethemostofallavailableopportunitiestogenerateattractivevalueadded

NewproductideasarepresentedintheRetailClientssegmentrsquosinnovationprocessknownasideascreeningwiththebestbeingselectedforlaunchInthiscontextreviewassignmentsforthedevelopmentofproductideaswereresolvedforthe2021financialyear

TomeetthedemandforsustainablefundsinthefuturetooproductdesignoptionsarecurrentlybeingreviewedinvariousworkinggroupsBoththelaunchofnewfundsandthereorganisationofexistingfundsarebeingexaminedinthiscontextInadditionadistinctionwillinfuturebedrawnbetweenfundswithasustainableinvestmentconceptandimpactfunds

32Institutionalclients

ItseemsincreasinglyunlikelythattheearningsdilemmaintheeurozonewillendintheforeseeablefutureInstitutionalinvestorsarehavingtospreadtheirinvestmentsmorebroadlyanduseexistinginvestmentopportunitiesmoreflexiblyinordertoachievetheyieldsthattheyurgentlyrequireAboveallthismeansadoptingamoreinternationalinvestmentfocusgeneratingmoremarket-basedandmarket-neutralriskpremiumsandproperlynetworkingtheiryieldsourcesSufficientyieldsarenowonlypossiblebytakinggreaterrisksAgainstthisbackdropthereisgreaterdemandthaneverforactive-dynamicassetmanagementandriskmanagementndashnotonlydefensivelyinordertolimitlossesbutalsoandinparticularoffensivelyintermsofseizingtheopportunitiesforyieldsinthemarket

UnionInvestmentsupportsinstitutionalinvestorsbyprovidingthemwithsolutionsforthepresentcapitalenvironment

26


33Real-estatefundsforretailinvestors

InordertodeveloptheservicerangefurtherandseizenewopportunitiesefficientlyUnionInvestmentisstartingarealignmentforfurtherprofitablegrowthwithrealestate

ThestrategicprojectIMMOmentumservestorealignthebusinessareainordertomeetthedynamicallychangingrequirementsoftherealestatemarketsuccessfullyThegoalistobettercaterfordesiredsalesintheRetailClientsandInstitutionalClientssegmentsbymeansofexpandedsourcingpotentialFortheRetailClientssegmentasignificantincreaseinbenefitsistargetedwhilealsomaintainingthecurrentriskrewardprofileTheInstitutionalClientssegmentistocaterforadiverseclientstructurebymeansofanappropriaterangeofproductsandservicesSafeguarding thefutureofpropertyportfoliosisalsobecomingincreasinglyimportantrequiringnewideasforthebuildingsrsquotenantsandusersInadditionsystematicidentificationofacquisitionpotentialon thenationalmarketsisalsoimportantinviewofthemorecompetitivetransactionmarketsAtanadministrativeleveleffectivenessandefficiencyaretobeincreasedbyfocussingonvalue-addingprocessesandmodernisationofthesystemanddatalandscapewithincreaseduseofdigitalisationopportunities

UnionInvestmentrespondstothechallengeofsafeguardingthefutureofthepropertyportfoliointhelongtermwithanintegratedconceptforadigitalecosystemthatcontributestostrategicportfolioprotectionthewithitsservicesfunctionsandaddedvalueandfacilitatesfutureinnovationsAswellastenantsownersandbuildingserviceproviderstheparticipantsinthisecosystemwillalsoincludethebuildinguserswhichwillthusextendthereal-estatevaluechainAsaresultofthisverticalisationandthedevelopmentofabetterunderstandingofthebuildingusersrsquoneedsconventionalofficepropertiesremainhighlyinterestingandcanusetheircompetitiveadvantagessustainablyInthecaseofUniImmoDeutschlandrsquosexistingpropertyldquoEmporiordquoforexampletheappldquoRunthisplacerdquowaslaunchedtoprovidegreatermobilityconvenienceandefficiencybycombiningvariousdifferentservicesfortheworkingdayAlongsidefunctionssuchascontactlessparkingotherfeaturesformoreproductivityinteractionandvarietyinday-to-dayofficeworkwillsoonbeavailable

27


V Position of the company

1 Result of operations

2020 2019 Change

EUR million EUR million EUR million

Interest-based business

Interestincomefromlendingandmoneymarketbusinessandfromfixed-incomesecurities

-17 -12 -05

Currentincomefromvariable-yieldsecuritiesandprofittransferagreements

89 98 -09

Interest expenses -10 -23 13

Allowancesforlossesonloansandreceivables

0 -01 01

Net interest income after allowances for losses on loans and receivables

62 62 ndash

Commission-based business

Fee and commission income 27800 26291 1509

Fee and commission expenses -12141 -11611 -530

Net fee and commission income 15659 14680 979

Net income from investment securities 435 24 411

Other net remeasurement income on financial instruments

-832 -434 -398

Net income from companies accounted for using the equity method

46 339 -293

Administrative expenses

Staffcosts -4519 -4280 -239

Other administrative expenses -3906 -4127 221

Depreciation and amortisation expense -766 -687 -79

Administrative expenses -9191 -9094 -97

Other operating result 315 925 -610

Consolidated earnings before taxes 6494 6502 -08

Income taxes -1892 -1697 -195

Consolidated net income 4602 4805 -203

Attributableto

Shareholders of Union Asset Management Holding AG

4508 4723 -215

Non-controlling interests 94 82 12

2020 2019 Change

Assets under management (final volumes) in EUR billion

3859 3682 177

Costincome ratio (CIR) 586 583 03

NetinterestincomeafterallowancesforlossesonloansandreceivablesintheyearunderreviewwasatthepreviousyearrsquoslevelatEUR62million

Netfeeandcommissionincomebreaksdownasfollows

2020 2019 Change



fromsalescommission 3778 3917 -139

frommanagementfees 22289 20703 1586

fromsecuritiesinvestmentfunds 18002 17048 954

ofwhichperformance-relatedfees 326 92 234

fromreal-estateinvestmentfunds 4287 3655 632

fromsecuritiescustodyaccounts 539 536 03

Other 1194 1135 59


forvolume-basedcommission -7607 -7294 -313

Other -4534 -4317 -217

Total 15659 14680 979

ThekeydriversinnetfeeandcommissionincomearetheassetsundermanagementfortherespectivefinancialyearGrowthinassetsundermanagementismainlydeterminedbynetnewbusinessandtheperformanceofthecapitalmarketsAssetsundermanagementincreasedsharplybyEUR177billionin2020toEUR3859billionattheendoftheyearndashanewrecordhighThisincreaseresultedfromthehighnetinflowsandthepositivedevelopmentsontheinternationalcapitalmarkets

Morethan80ofnetfeeandcommissionincomeparticularlythemainshareofincomefrommanagementfees(notincludingperformancefeesortransactionfeesfromreal-estateinvestmentfunds)andexpensesforvolume-relatedfeesandcommission(comprisingtrailcommissionsalescommissionandotherfeesandcommission)isdeterminedbythevolumeofassetsundermanageshymentInnettermsthesetwoitemsincreasedsignificantlybyEUR738millionThiswasduetotheslightlyhigheraveragevolumeofassetsundermanagement(up45)

28


Thesubstantialincreaseinmanagementfeesfromreal-estateinvestmentfundswasdue inparticulartotheconsiderablyhigheraveragevolumeofreal-estateinvestmentfunds(up105)andthesignificantriseintransactionfeesinthepropertysector

Incomefromperformance-basedmanagementfeeswasupsubstantiallyyear-on-yearat EUR326million(EUR92million)

Incomefromsalescommissionprimarilycontainedthegrossamountofthefront-endfeesgeneratedThesharespaidtodistributionpartnersassalescommissionareincludedinotherfeeandcommissionexpensesOnbalancetheseweremuchlowerthaninthepreviousyear

TheincreaseinnetincomefrominvestmentsecuritiesofEUR411milliontoEUR435million(previousyearEUR24million)isprimarilyduetoone-timeincomegeneratedinconnectionwiththemajorityacquisitionofZBIPartnerschaftsholdingGmbH

OthernetremeasurementincomeonfinancialinstrumentsamountedtoEUR-832millionafterEUR-434millioninthepreviousyearThedeclineismainlyattributabletosignificantlyincreasedexpensesforthemeasuredguaranteepledgesforinvestmentproductsBycontrastnetincomefromthemeasurementofUnionInvestmentrsquosown-accountinvestmentsandfromthemeasurementofoptionsinconnectionwiththeacquisitionofsharesinanequityinvestmentincreasedsignificantly

Netincomefromcompaniesaccountedforusingtheequitymethodwasconsiderablyloweryear-on-yearatEUR46million(previousyearEUR339million)andprimarilyrelatedtotheshareoftheprofitorlossofZBIPartnerschafts-HoldingGmbHErlangenandofBEAUnionInvestmentManagementLimitedHongKongThisitemalsoreflectstheUnionInvestmentGrouprsquosshareoftheprofitorlossofR+VPensionsfondsAktiengesellschaftWiesbadenandcompertisBeratungsgesellschaftfuumlrbetrieblichesVorsorgemanagementmbHWiesbaden

AtEUR9191millionadministrativeexpenseswereupslightlybyEUR97milliononthepreviousyearrsquoslevel(EUR9094million)

ThemoderateincreaseinstaffcostsmainlyresultedfromaveragesalaryadjustmentsthestaffingofnewandvacantpositionsandprorataeffectsinconnectionwiththemajorityacquisitionofZBIPartnerschafts-HoldingGmbH

Otheradministrativeexpenseswereconsiderablyloweryear-on-yearatEUR3906millionfallingbyEUR221million(previousyearEUR4127million)Thisreflectedtheeffectsofthemeasurestakenin2020tosecureearnings

2020 2019 Change


Total -3906 -4127 221

IT expenses -1090 -1055 -35

Publicrelationsmarketing -591 -752 161

Consulting -610 -579 -31

Officeexpenses -378 -459 81

Property and occupancy costs -231 -218 -13

Miscellaneous -1006 -1064 58

Otheradministrativeexpensesdecreasedprimarilyduetopublicrelationsmarketingofficeexpensesandotheradministrativeexpenses(recognisedunderldquoMiscellaneousrdquo)

Depreciationandamortisationexpensewassignificantlyhigheryear-on-yearatEUR-766millionrisingbyEUR-79million(previousyearEUR-687million)Thischieflyresultedfromamortisationonintangibleassetsandonright-of-useassets

TheotheroperatingresultamountedtoEUR315millionintheperiodunderreviewandwasthereforeconsiderablybelowthepreviousyearrsquosfigureofEUR925millionThepreviousyearrsquosfigurewasmainlyinfluencedbythedeconsolidationgainrealisedonthesaleofUnionInvestshymentTowarzystwoFunduszyInwestycyjnychSA(TFI)Poland

Basedonagrouptaxrateof3126theeffectivetaxratewithintheUMHGroupwas2913(previousyear2610)IncometaxexpenseincreasedbyEUR195millionyear-on-yearto EUR1892millionintheyearunderreviewItcomprisescurrenttaxexpenseofEUR2108million(previousyearEUR1873million)anddeferredtaxincomeofEUR216million(previousyeartaxincomeofEUR176million)Theincreaseincurrenttaxexpensewascausedbythelowershareoftax-exemptincomeinconsolidatedearningsbeforetaxesThedeferredtaxincomewaslargelyduetotherecognitionofdeferredtaxassetsforliabilityderivatives

Overallthedevelopmentsdescribedledtoaslightyear-on-yeardeclineinconsolidatedearningsofEUR203milliontoEUR4602million(previousyearEUR4805million)

Inadditionthelowcostincomeratio(CIR)of586istestimonytotheefficientuseofresourceswithintheUnionInvestmentGroupTheCIRroseslightlyby03percentagepointsyear-on-year

29


Comparisonwithearningsoriginallyforecastfor2020

Theoriginalforecastsforconsolidatedearningsin2020weresignificantlyexceededThispositivedevelopmentwastheresultofasignificantincreaseinnetfeeandcommissionincomeduetoslightlyhighervolume-basedincomeAsignificantriseinperformance-relatedmanagementfeesalsoresultedinafurtherincreaseinincomeInadditionthesubstantialdeclineinadminisshytrativeexpensesledtoafurtherimprovementinearningsascomparedtotheoriginalplanningThiswasprimarilyduetolowerexpensesforofficeoperationspublicrelationsmarketingconsultingotheradministrativeexpensesandamortisationonright-of-useassetsBycontrastthefinancialresultndashcomprisingnetinterestincomenetincomefrominvestmentsecuritiesandothernetremeasureshymentincomeonfinancialinstrumentsndashdecreasedsignificantlyThiswasmainlyattributabletothesignificantlyincreasedexpensefromthemeasurementofguaranteepledgesforinvestmentproductsaswellastheopposingeffectsfromone-timeincomegeneratedinconnectionwiththemajorityacquisitionofZBIPartnerschaftsholdingGmbHandthesignificantlyincreasedpositivevaluecontributionfromown-accountinvestmentInnettermsthisresultedinastrongimproveshymentinearningsandasignificantlyimprovedCIRcomparedwiththeoriginalplanning

Distribution

ThepaymentofadividendofEUR796persharewillbeproposedattheAnnualGeneralMeetingon17May2021ThiswouldequatetoatotaldividendpaymentofEUR2312millionTheSupervisoryBoardofUMHAGapprovedtheproposedappropriationofprofitatitsmeetingheldon26February2021

2 Liquidity management and financial position

21Liquiditymanagement

Principlesandobjectivesoffinancialmanagement

AswellasensuringthatthecompaniesoftheUnionInvestmentGroupcanmeettheirpaymentobligationsatalltimestheaimofliquiditymanagementisthereturn-andrisk-orientedinvestmentofavailablefinancialresources

ThemanagementisbasedonconstantmonitoringandanalysisofallfinancialresourcesandcashflowsofthecompaniesBuildingonthisregularliquidityplanningdeterminestheshort-andmedium-termliquiditysituationTheplanningissupportedbyITsystems(SAPBusinessWarehouse)Ithasamonthlyrollingstructurecoveringaplanningperiodof15monthsbasedonthelatestearningsforecastsTheplannedcashinflowsandoutflowsarethusderivedfromthebudgetedincomeandexpensesandfromtheforeseeablechangesinstatementoffinancialpositionitemsthataffectliquidity

Theresultsofliquidityplanningserveasthebasisfortheallocationoffinancialresourceswithinthefollowingfourcategories

bullInvestmentsforshort-termliquiditymanagement Financialresourceswithanexpectedinvestmentdurationoflessthanthreeyearsincludebankbalancesaswellasinvestmentsinmoney-marketfundsfixed-incomefundsinvestinginshort-termfixed-interestsecuritiesandotherproductssuitableforshort-terminvestment

bullFunding InvestmentsasinitialfundingoffundsareoftennecessarytoplaceanewinvestmentproductonthemarketTheamountrequiredisdecidedupononacase-by-casebasisafterareviewofnecessityFundingisgenerallyrepaidwithinsixmonthsThiscategoryalsoincludesfinancialresourceswithcontractualcommitments

bullStrategicinvestments(long-terminvestments) StrategicinvestmentshaveanexpectedinvestmentdurationofatleastthreeyearsandcompriseinvestmentsinfundsorsecuritiesthatareselectedonthebasisofriskrewardcriteriaTheexpectedtermofeachinvestmentisdeterminedwhenthegroupentersintothespecifictransaction

bullEmployeeinvestments Employeeinvestmentscompriseallcashinvestedforemployeesofthecompanyaspartofpensionplansandemployeeretentionprogrammes

OnthebasisoftheforecastcashflowsfromoperatingactivitiesthespecificselectionofinvestshymentalternativesisperformedaspartoftacticalliquiditymanagementTheinvestmentdecisionincorporatesregularstresstestsasafurtherelementinthisstrategyinordertoassesstheeffect ofchangesininterestratesonthegrouprsquoscashpositionsTheinvestmentstrategyisgenerallyaconservativeone

Thefourcategoriesoffinancialresourcesaresubjecttoconstantriskmonitoring

30


22Groupfinancialposition

Thetablebelowshowstotalcashandcashequivalents



Securities holdings 17181 746 15087 737 2094

Bank holdings 5862 254 5370 263 492

Total cash and cash equivalents

23043 1000 20457 1000 2586

Thesecuritiesholdingsbreakdownasfollowsintothefourcategoriesoffinancialresources



Short-term investments for liquidity management purposes

4161 242 4538 301 -377

ofwhichfixed-incomefunds 4161 242 4538 301 -377

Strategic investments 12072 703 9534 632 2538

ofwhichfixed-incomefunds 11374 662 8626 572 2748

ofwhichmoney-marketfunds 619 36 384 25 235

ofwhichreal-estatefunds 43 03 45 03 -02

ofwhichequityfunds 24 01 312 21 -288

ofwhichmixedfunds 11 01 167 11 -156

ofwhichhybridfunds 01 0 0 0 01

Funding 918 53 989 66 -71



ofwhichequityfunds 55 03 26 02 29

ofwhichalternativeinvestmentfunds 44 03 80 05 -36

ofwhichhybridfunds 06 00 09 01 -03

ofwhichreal-estatefunds 01 00 0 0 01

ofwhichotherfunds 17 01 20 01 -03



Employee investments 30 02 26 02 04


ofwhichmixedfunds 06 01 05 01 01


ofwhichotherfunds 03 0 0 0 03

Total securities 17181 1000 15087 1000 2094









Takingintoaccountthebalanceoffinancialresourcesavailableasattheendofthereportingperiodandthechangesinliquidityforecastbythemonthlyrolling15-monthliquidityplanningprocessiftheplannedlevelofperformanceisachievedthecompanieswithintheUnionInvestmentGroupatthetimeatwhichthemanagementreportwaspreparedwillbeabletomeettheirfinancialobligationsbecomingdueinthesaidplanningperiodfromtheavailablecashandcashequivalentsatalltimes

31


3 Net assets

31Overviewofnetassets

Thefollowingtableshowsasummaryoftheindividualitemsoftheconsolidatedstatementoffinancialpositionbyfinancialcategory

Assets 31 Dec 2020 31 Dec 2019 Change


Liabilities and advances to

Banks 5920 170 5415 184 505

Customers 802 23 1094 37 -292

Asset derivatives 0 00 281 10 -281

Investment securities 17430 500 15035 512 2395

Shares in companies accounted forusingtheequitymethod

617 18 1302 44 -685

Propertyplantandequipment andintangibleassets

3437 99 1747 60 1690

Income tax assets 1073 31 904 31 169

Rightofuseassets 3004 86 1030 35 1974

Miscellaneous assets 2176 62 2172 74 04

Assetsheldforsale 392 11 377 13 15

Total assets 34851 1000 29357 1000 5494

Equity and liabilities 31 Dec 2020 31 Dec 2019 Change


Liabilities to

Banks 301 09 269 09 32

Customers 15 00 12 00 03

Liabilityderivatives 1799 52 966 33 833

Provisions 2574 74 2287 78 287

Incometaxliabilities 599 17 685 23 -86

Leaseliabilities 3024 87 1041 35 1983

Miscellaneousliabilities 8657 248 8552 292 105

Liabilitiesheldforsale 0 00 0 00 ndash

Equity 17882 513 15545 530 2337

Total equity and liabilities 34851 1000 29357 1000 5494

Consolidatedtotalassetsincreasedby19year-on-yeartoEUR34851millionAsistypicalfortheindustrytheassetsmanagedbytheUnionInvestmentGroupforitsclientsndashinvestmentfundsandotherassetmanagementformatsndasharenotreportedinthestatementoffinancialposition

AsaresultofthemajorityacquisitionofZBIPartnerschafts-HoldingAGErlangen(ZBI)fourcompaniesoftheZBIGroupwereaddedtotheconsolidatedgroupInthiscontextnetassetsofEUR1056millionwereaddedtotheconsolidatedstatementoffinancialposition

TheassetssideoftheconsolidatedstatementoffinancialpositionisdominatedbycashandcashequivalentsbankholdingsandsecuritiesTotalcashandcashequivalentsincreasedbyEUR2586milliontoEUR23043millionBankholdingsareincludedintheloansandadvancestobanksitemandclimbedbyEUR492milliontoEUR5862millionSecuritiesaremainlyrecognisedunderinvestmentsecuritiesThesecuritiesportfolioincreasedbyEUR2094milliontoEUR17181millionThebreakdownofcashandcashequivalentsisexplainedinthelsquoFinancialpositionrsquosection

In the previous year asset derivatives included options that entitled UMH to purchase shares in a companyinthefutureTheoptionwasincorporatedinthetransactioncostsaspartoftheacquisitionofanequityinterestinZBI

ThedecreaseinsharesincompaniesaccountedforusingtheequitymethodischieflyduetothemajorityacquisitionofZBIUpuntiltheacquisitiondatethiscompanywasincludedusingtheequitymethodAspartofthetransitionalconsolidationthecarryingamountofequityasattheacquisitiondateofEUR497millionwasderecognised

Additions to property plant and equipmentofEUR138millionwereoffsetbydepreciationofEUR22millionIncludingotherchangesthenetcarryingamountofpropertyplantandequipmentincreasedbyEUR113millionfromEUR254millioninthepreviousyeartoEUR367million

Additions to intangible assetsofEUR364millionwereoffsetbyamortisationintheamountofEUR439millionintheyearunderreviewAsaresultofthemajorityacquisitionofZBIgoodwillofEUR988millionandotherintangibleassetsofEUR665millionwererecognisedIncludingotherchangesthenetcarryingamountincreasedbyEUR1493millionfromEUR1493millioninthepreviousyeartoEUR3070million

MiscellaneousassetsincludereceivablesfromfundsofEUR1770million(previousyear EUR1665million)andreceivablesfromothertaxesofEUR146million(previousyear EUR229million)Thereceivablesfromfundslargelycompriseddeferredreceivablesfrommanagementfeesandflat-ratefeesforthemonthofDecember

Right of use assetsincreasedparticularlyasaresultoftakingoccupancyoftheofficespaceintheWINXbuildinginFrankfurtandtherenewaloftherentalagreementsfortheofficespaceinEmporioinHamburg

LiabilitiestobanksandcustomersincreasedbyEUR36millionfromEUR280millionto EUR316millionprimarilyasaresultofcommissionliabilitiesinconnectionwithfundunittrading

32


LiabilityderivativesincludedEUR1799millionrelatingtomeasuredcapitalpreservationcommitmentsinaccordancewiththeGermanPersonalPensionPlanCertificationAct(AltZertG)andminimumpaymentcommitmentsinconnectionwithactualguaranteefunds(previousyearEUR872million)InthepreviousyearthisitemofthestatementoffinancialpositionstillincludedoptionsthatentitledUMHtopurchasesharesinacompanyinthefutureTheoptionswereincorporatedinthetransactioncostsaspartoftheacquisitionofanequityinterestinZBI

31 Dec 2020

EUR million

31 Dec 2019

EUR million

Change

EUR million

Provisions for employee benefits 2395 2119 276

Provisionsfordefinedbenefitobligations 1533 1376 157

Provisionsforotherlong-termemployeebenefits

856 737 119

Provisionsforterminationbenefits 06 06 ndash

Other provisions 179 168 11

Total 2574 2287 287

ProvisionsincreasedbyEUR287millionfromEUR2287milliontoEUR2574millionProvisionsfordefinedbenefitobligationsrosebyEUR157millionfromEUR1376milliontoEUR1533millionProvisionsforotherlong-termemployeebenefitsincreasedbyEUR119millionfromEUR737milliontoEUR856millionOtherprovisionsincreasedbyEUR11millionfromEUR168millionto EUR179million

EquityincreasedbyEUR2337millionfromEUR15545milliontoEUR17882millionTheincreasewasprimarilyduetothedividendforthepreviousyearpaidoutinthefinancialyear(EUR2001million)comparedwithtotalcomprehensiveincomeintheyearunderreview(EUR4380million)Theequityratiowas513down17percentagepointsontheprior-yearfigureof530

32Non-financialperformanceindicators

EmployeesTheUnionInvestmentGrouprsquosworkforceiscriticaltoitsperformancefutureprofitabilityandcompetitivenessTheUnionInvestmentGrouppursuesaninnovativeneeds-drivenprofessionaldevelopmentstrategyinordertoprovidethebestpossibleframeworkinwhichitcannurturethecapabilitiesandcommitmentofitsemployeesinlinewiththeirresponsibilitiesandpotenshytialInthe2020financialyearatotalofaroundEUR23millionwasinvestedinhumanresourcesdevelopmentactivities(previousyearEUR38million)Target-drivenpeoplemanagementandtheuseofperformance-relatedremunerationhelptoensurethatemployeesatalllevelslearntothinkandactfromabusinessperspectiveEmployeemotivationandcommitmenttothistarget-basedapproacharealsoencouragedbyvariableremunerationcomponentsbasedonindividualperformancetargets

Asat31December2020UMHemployed330people(previousyear317employees)withanaverageageof429(previousyear429)andanaverageperiodofserviceof109years(previousyear108years)TheUnionInvestmentGroupemployed3929peopleasattheendof2020(previousyear3200)Acrossthegrouptheaverageageofemployeeswas433(previousyear428)andtheaverageperiodofservicewas111years(previousyear107years)

ThenumberofemployeesintheUnionInvestmentGroupasat31December2020includesthenewcompanyZBIHoweverthekeyfiguresforaverageageandaverageperiodofserviceatUIGwereanalysedwithoutincludingZBIasthecorrespondingdatawerenotavailableduetotheinitialconsolidation

BrandperformanceThefiguresbasedontraditionalparametersformeasuringbrandperformanceremainedatahighlevelin2020withthenormalslightfluctuationsPopulation-basedaidedawarenessoftheUnionInvestmentbrandfellfrom610inDecember2019to607asofDecember2020Aidedadvertisingrecallroseto339inDecember2020after310asofDecember2019whilewillingnesstopurchaseincreasedfrom335to420inthesameperiod

In2013UMHstartedtorecordbrandstrengthindexdataforalltargetgroupsrelevanttothebrandaspartofitsstrategicbrandmanagementactivitiesThisindexisdeterminedfromwell-establishedbrandmanagementparametersandisexpressedasavaluebetween0and100AmongUIPrsquostargetgroupstheindexvalueforretailinvestorsrosebyonepointto72indexpointsin2020whilethefigureforbrokerbanksalsoincreasedbyonepointto93Thebrandstrengthindexfigureforinstitutionalinvestorswas85in2019ndashonepointhigherthanintheprevioussurveyin2017Itwasnotpossibletodeterminetheindexintheinstitutionalinvestorstargetgroupin2020fortechnicalreasonsrelatingtodatacollectionLikewiseitwasnotpossibletodeterminetheindexvalueforrealestatebusinesspartnersin2020fortechnicalreasonsrelatingtodatacollectionIn2019thefigurecameto84pointsandwasthusunchangedincomparisontotheprevioussurveyfrom2017Inthemostrecentmeasurementfrom2018thebrandstrengthindexfigurefortenantsinpropertiesofUIRUIIwas72indexpointsThefigureforthistargetgroupwas71pointsatthetimeoftheprevioussurveyin2016Thebrandstrengthindexfigurefortenantswasnotascertainedin2019or2020ndashatenantsurveyhadbeenplannedfor2020butdidnottakeplaceduetotheCOVID-19pandemicGiventhevaryingrelevanceofthebrandinthedecision-makingprocesswithinthedifferenttargetgroupsthecurrentvaluesforallthetargetgroupsareseenaspositivefromabrandmanagementperspective

AsbrandisbecomingmoreimportantinthecourseofdigitalisationandhashighpriorityatUnionInvestmentandgiventhatnumerousmeasuresarebeingpursuedtostrengthenthebrandweexpecttoconsolidatetheseverygoodvaluesfurtherinthefuture

InacomparisonwiththeperformanceofcompetitorbrandsthepictureestablishedoverthelastfewyearshasremainedlargelyunchangedUnionInvestmentremainswellaheadofmostofitscompetitorsintermsofthestrengthofitsbrandThisbrandthereforeconstitutesavaluableasset fortheUnionInvestmentGroupoverthelongterm

33


ClientsatisfactionAmongtheUnionInvestmentbrandrsquosclientgroupstheonlyoneforwhichnewclientsatisfactionsurveyswereconductedintheyearunderreviewwasretailinvestors

Theclientsatisfactionsurveyforcooperativebrokerbanksthatisconductedroughlyeverytwoyearswasnotconductedin2020Intheroundofsurveysattheendof2018theaveragesatisfactionscoreforGenobankexecutiveswas20ThefiguremeasuredatthesametimeforGenobankconsultantswas22Asinthepreviousyeartheaveragesatisfactionscoreamongretailinvestorsin2020was22onascalefrom1=ldquoextremelysatisfiedrdquoto5=ldquounsatisfiedrdquo

InternalsatisfactionsurveysarecarriedoutamongUnionInvestmentrsquosinstitutionalinvestorsonatwo-yearcycleThesurveysareconductedinodd-numberedyearssotherearenosurveyresultsforthereportingyearOnascalefrom1=ldquoextremelysatisfiedrdquoto5=ldquounsatisfiedrdquothescorefortheoverallsatisfactionofinstitutionalinvestorswiththeirbusinessrelationshipwithUnionInvestmentwas181inthemostrecentsurveyfrom2019

ThehighlyregardedindependentcompanyGreenwichAssociatescarriesoutstudiesoftheGermaninstitutionalassetmanagementmarketonanannualbasisInstitutionalinvestorsaresurveyedontheperformanceoftheassetmanagerstheyarecurrentlyworkingwithUnionInvestmentdidnotpurchasetheresultsoftheGreenwichstudyin2020NeverthelessUnionInvestmentwasdesignatedasaldquoGreenwichQualityLeaderrdquoThisstrictlylimitedtitleisawardedtojusttwoorthreeassetmanagerseachyearthatachieveoutstandingperformanceintheircustomersrsquoperception

Satisfactionsurveysareconductedonatwo-yearcycleamongtenantsofUnionInvestmentRealEstateGmbHandUnionInvestmentInstitutionalPropertyGmbHpropertiesDuetotheCOVID-19pandemicwhichledtocriticalearningssituationsformanytenantsinkeytenantgroupsndashofficetenantshotelsandretailtenantsinshoppingcentresndashUIRandUIIdecidedinconsultationwithUMHwhichconductsthesurveys(andwheretheUIGrsquoscentralmarketresearchisbased)topostponetheclientsatisfactionsurveythatwasduetobeconductedintheyearunderreviewThemostrecentsurveyisthereforefrom2018

In2018thesatisfactionvaluesremainedatagoodlevelcomparedwiththetimeofthepreviousmeasurementOnascalefrom1=ldquoextremelysatisfiedrdquoto5=ldquounsatisfiedrdquothescoreforthesatisfactionoftenantsinUnionInvestmentRealEstateGmbHUnionInvestmentInstitutionalPropertyGmbHpropertiesinGermanyremainedat23in2018

Thegoalofmaintainingthehighcustomersatisfactionlevelsinalltargetgroupsinfundbusinessinthe2021financialyearisanambitiousoneThisisduetothefactthatcustomerssoonbecomeaccustomedtothelevelofserviceofferedandrequirethisonapermanentbasisForexampleanewservicefeaturethatenthusescustomerstheyearitisintroducedissubsequentlyrequiredas anormalpartoftheserviceandnolongerleadstoexcellentsatisfactionscores

Itisdifficulttoforecasthowtenantsatisfactionwilldevelopinthe2021financialyearOnedrivingfactorforthedevelopmentwillundoubtedlybethefurthercourseoftheCOVID-19pandemicanditsimpactontheeconomicsituationofthetenantgroupsInthebest-casescenarioweexpectthemostrecentlymeasuredhighlevelofclientsatisfactiontobemaintainedThisforecastisbasedpartlyontheassumptionthattenantsndashjustlikeB2CandB2Bclientsinfundbusinessndashwillquicklygetusedtothelevelofserviceofferedandsimplymaintainingthislevelwillnolongerbeenoughtomaintainthesatisfactionscoreachieved

Employee volunteering with the mitMenschen initiativeSociallyresponsiblevolunteeringbyemployeesformspartoftheUnionInvestmentGrouprsquossustainabilitystrategyThemitMenscheninitiativewaslaunchedinthe2006anniversaryyeardrivenbyadesiretogivesomethingbacktothecommunity

SinceNovember2012employeeshavebeenabletoorganisesuchactivitiesthemselvesTothisendUnionInvestmentmaintainsadatabaseofsociallyresponsibleactivitiesonitsintranetwhereprojectsareaddedandemployeescansignupforthem

Atotaloffiveemployeeprojectswereimplementedin2020threeofwhichtookplaceattheFrankfurtlocationwhiletwowereinitiatedonacross-locationbasisAcrossthegroup192employeesfromallhierarchylevelsandtheFrankfurtHamburgandLuxembourglocationsdevotedaround675hoursoftheirowntimetovolunteerforsevenorganisations

This work helped socially disadvantaged children young people and adults and people with disabilitiesForexampletheemployeessupportedcharitiessuchastheVereinHoumlchsterLeuchtshyfeuertheInternationalesKinderhausinFrankfurtandtheTeestubeJonainFrankfurtrsquosrailwaystationdistrictAnenvironmentalprojectwasalsoimplementedforthefirsttimewithemployeesacrossdifferentlocationspickinguplitterinsupportoftheforestationorganisationldquoDeutschlandforstetaufrdquo

34


33Statementofcashflows

ThepurposeofthestatementofcashflowsistodetermineandpresentcashflowsgeneratedorusedbytheUnionInvestmentGroupinitsoperatingactivitiesinvestingactivitiesandfinancingactivitiesinthefinancialyear

AstatementofcashflowsisnotparticularlymeaningfulasfarasinvestmentcompaniesareconcernedTheUnionInvestmentGrouprsquosstatementofcashflowsdoesnotreplaceliquidityorfinancialplanningnorisitusedasamanagementtool

2020 2019

EUR million EUR million

Cashflowfromoperatingactivities 5762 7585

Cashflowfrominvestingactivities -3341 -4695

Cashflowfromfinancingactivities -2421 -2890

=Changesincashandcashequivalents 0 0

+Cashandcashequivalentsatthebeginningoftheyear 0 0

= Cash and cash equivalents at the end of the year 0 0

CashandcashequivalentsinthestatementofcashflowscorrespondtothecashandcashequivalentsiteminthestatementoffinancialpositionwhichcomprisescashinhandandbalancesatcentralbanksplusdebtinstrumentsfrompublicsectorentitiesandbillsofexchangeeligibleascollateralforcentralbankfundingiftheresidualmaturityislessthanthreemonthsandtheamountsconcernedaredeemedtobetheretentionofliquidityLoansandadvancestobanksthatarerepayableondemandarenotincludedtheseitemsareassignedtooperatingactivities

CashflowfromoperatingactivitieswasdeterminedusingtheindirectmethodandprovidesinformashytiononcashflowsfromtheresultsofthemainactivitiesrecognisedintheincomestatementandfromchangesinitemsofthestatementoffinancialpositionfromtheUnionInvestmentGrouprsquosbusinessactivitiesthatarenotattributabletoinvestingorfinancingactivitiesThiscashflowdemonstratestheUnionInvestmentGrouprsquosabilitytogeneratecashfromitsoperatingactivitiesandfromitsownresourcesinordertomeetitsobligationsmaintainitsoperationspaydividendsandsupportcapitalexpenditurewithouthavingtoresorttoexternalsourcesoffunding

ThemainfeaturesofcashflowfrominvestingactivitiesintheyearunderreviewwereproceedsofEUR6131millionfromthedisposalofinvestmentsecuritiesandpaymentsofEUR8121milliontoacquireinvestmentsecuritiesTheacquisitionofconsolidatedcompaniesresultedinpaymentsofEUR850millionTherewerealsopaymentsofEUR364millionfortheacquisitionofintangibleassetsandpaymentsofEUR138millionfortheacquisitionofpropertyplantandequipment

InaccordancewiththedefinitioninIAS717cashflowfromfinancingactivitiescomprisedcashflowsarisingfromtransactionswithequityholdersandothershareholdersinconsolidatedsubsidiariesfromothercapitalfromtherepaymentofleaseliabilitiesandfromtheutilisationandrepaymentofloansandotherborrowingsCashflowfromfinancingactivitieswasprimarilyaccountedforbythepaymentbyUMHofthedividendforthe2020financialyearamountingtoEUR2001millionandthepaymentofdividendsfromsubsidiariesofUMHtonon-controllinginterestsamountingtoEUR70millionCashpaymentsfortheprincipalportionofleaseliabilitiesamountedtoEUR277millionandchangesincashfromothercapitalamountedtoEUR73million

VI Dependent company report

ThecompanyreceivedappropriateconsiderationforthetransactionsandmeasureslistedinthedependentcompanyreportbasedonthecircumstancesknowntotheBoardofManagingDirectorsatthetimesuchtransactionsandmeasureswereperformedortakenThecompany wasnotdisadvantagedasaresultofmeasuresbeingtaken

ThecompanyhasnotattheinstigationorintheinterestsofDZBANKAGDeutscheZentral-Genossenshyschaftsbank(DZBANKAG)FrankfurtamMainoroneofitsaffiliatedcompaniesneglectedtocarryoutanymeasurethatcouldhavebeenbeneficialtothecompanybasedonthecircumstancesknowntotheBoardofManagingDirectorsatthetime

35



ReportinaccordancewithSection289f(4)inconjunctionwith(2)no4oftheGerman CommercialCode(HGB)

ThecompanyrsquosSupervisoryBoardhassettargetsfortheproportionofwomenonthecompanyrsquosSupervisoryBoardandBoardofManagingDirectorspursuanttoSection111(5)oftheGermanStockCorporationAct(AktG)tobemetby31December2021

ThetargetsetfortheSupervisoryBoardis20(3outof15)Intheperiodunderreview theproportionofwomenontheSupervisoryBoardwas267(4outof15)

TheproportionofwomenontheBoardofManagingDirectorsinthereportingperiodwas0 TheSupervisoryBoardhasdeterminednottosetabindinghighertargetuntil31December2021



D Forecast report on risks and opportunities

I Report on opportunities

AtUMHthegrouprsquosbusinessperformanceisparticularlyreflectedinthecurrentresultonequityinvestmentswithinwhichadistinctionmustbedrawnbetweenprofitandlosstransferandincomefromequityinvestmentsInthecaseofprofitandlosstransfertheprofitorlossgeneratedbythesubsidiaryistransferreddirectlytoUMHwhileincomefromequityinvestmentscomprisesdividendspaidbythesubsidiarytoUMHwhichcandifferfromtheprofitorlossgeneratedfortheyearThefollowingopportunitiesareseeninthiscontextandwouldprimarilyaffectUMHrsquoscurrentresultonequityinvestments

ThecurrentlowlevelofinterestratestowhichthereremainsnoendinsightmeansthereareonlynegligiblereturnsoninvestmentAssuchinvestorscanonlygenerateareturniftheyarepreparedtotakecontrolledrisksUnionInvestmentbelievesthereisanopportunityinthisenvironmentforittofurtherconsolidateitspositionasanactiveriskmanagerbothforretailinvestorsandinstitutionalclientgroupsandtoexpanditsfundbusiness

InadditiontoregularlyreviewingtheproductrangethefocusfortheclientgroupofretailinvestorsremainsongeneratingvalueaddedviafundsandsolutionsthatreflectthecurrentmarketenvironmentInstitutionalinvestorsarefocusingonflexibleproductsinordertotakeadvantageoftheavailableinvestmentopportunitiesInparticularthismeansadoptingamoreinternationalinvestmentfocusgeneratingmoreriskpremiumsandproperlynetworkingtheiryieldsourcesThisisaccompaniedbyashiftawayfromconventionalbenchmarkthinkingandtowardsactiveanddynamicmanagement

ThetopicofsustainabilityremainsimportanttothetargetgroupofinstitutionalclientsAtthesametimetheeconomicbenefitsofsustainabilityarebecomingincreasinglyimportanttooUnionInvestmentofferssociallyresponsibleinvestments(SRI)acrossmanyassetclassesandprovidesactiveassistanceintheareaofcorporategovernance

InrecentyearsalargenumberoflegislativeprovisionshavebeenimplementedorinitiatedwithasignificantimpactonsecuritiesbusinessadditionalmeasuresareinpreparationInlightofthesedevelopmentsUnionInvestmentbelievesthatthereisanopportunitytodevelopcustomisedsolution-orientedproductsandtostrengthencustomerloyaltyinbothretailandinstitutionalclientbusinessUnionInvestmentoffersinstitutionalproviderssolutionsthatminimiseregulatoryeffortandexpenseandsaveequitySpecificreportingsolutionscanfurtherreducetheeffortandexpenseforinvestorsofmeetingregulatoryrequirements

DigitaltransformationissteadilycomingtoallareasofsocietyandbusinessThisdevelopmentgivesUnionInvestmentthepotentialtocreatenewcustomerbenefitsandtoimproveprocessesatallstagesofthevaluechain

TheCOVID-19pandemicisevenintensifyingsomeofthesetrendsForexamplethetrendtowardsgreatersustainabilityisnowplayinganincreasinglyimportantroleforretailclientstooandis

1 InlinewiththerequirementsofGermanlawthecontentofthecorporategovernancedeclarationinaccordancewithSection289f(4) oftheGermanCommercialCode(HGB)(disclosuresontheproportionofwomen)hasnotbeenaudited

36


accordinglytakenintoaccountwhenmakinginvestmentdecisionsThelowinterest-rateenvironmentisbeingcementedandevenexpandedbytheextensivestimuluspackagesworldwidemakingfundinvestmentincreasinglyattractiveascomparedtootherformsofinvestmentThesameappliestoprivatepensionprovisionsFirstlytheglobalincreaseingovernmentdebtcomesattheexpenseofthebasisforstatutorypensionprovisionsSecondlylowinterestratesareincreasinglyimpactingtheinvestmentperformanceoflong-termpensionsavingsprocessesthatarebasedoninterest-bearingsecurities

BasedontheidentifiedopportunitiesUnionInvestmentbelievesthereistheprospectofcontinuallyboostingitsnetsalesandthevolumeofassetsundermanagementtherebyfurtherincreasingtheresultingfeeandcommissionincomeforthegroupUnionInvestmentisalsoconstantlyworkingtoimproveitsprocessestherebysavingtimeandcostsOverallthisresultsinbothexpense-andincome-basedopportunitiestogenerateanexcellentearningsperformance

II Report on risks

1 Proven systems for identifying and managing risks

TheUnionInvestmentGroupisanassetmanageranditsperformanceisthereforeinfluencedtoalargedegreebytrendsintherealestateandcapitalmarketsandbytheinvestmentbehaviouroffundinvestorsItactsintheinterestsoffundinvestorsandpursuesavaluedrivenbusinesspolicywiththelong-termobjectiveofgeneratingasustainedincreaseinenterprisevaluetakingintoaccountabalanceofrisksandrewards

TheinternalmanagementsystemsaredesignedsuchthatriskscanbeidentifiedmonitoredonaregularbasisandactivelymanagedamongotherthingsThesystemsaimtoensurethatriskspotentiallyleadingtonegativevariancesfrompredictedperformanceareidentifiedasearlyaspossibleandthatcorrectiveactionisinitiatedtomitigatetheriskAtthesametimetheaimisalsotoensurethatthegroupcanexploitbusinessopportunitiestakingintoaccountprofitabilityandthegrouprsquosrisk-bearingcapacity

TheUnionInvestmentGrouprsquosriskmanagementsystem(RMS)isacontinuousprocessthatincorposhyratesallorganisationalmeasuresandproceduresforidentifyingmeasuringmonitoringandmanagingrisksTheRMSisorganisedincompliancewithregulatoryrequirementsUMHisacompanywithintheDZBANKGroupandisthusintegratedintotheriskmanagementsystemofthisgroup

TheBoardofManagingDirectorsofUMHbearsresponsibilityforriskmanagementwithintheUnionInvestmentGroupTheriskstrategycategorisesthematerialtypesofriskidentifieddefinesthefundamentalriskmeasurementmethodsusedandprovidesdetailedguidanceonhowtodealwiththeriskinquestionTheriskstrategyisconsistentwiththeriskstrategiesimplementedwithintheDZBANKGroupRiskmeasurementandmanagementprocedureshavebeendevisedforallthematerialrisktypesriskconcentrationsandinteractionwithinvestmentfundassetsidentifiedintheriskinventoryTheRiskandDataQualityManagementCommitteeisthecentralriskcommitteewithintheUnionInvestmentGroupAtitsmeetingsitdiscussesthegrouprsquosrisk

situationandpreparesdecisionsfortheBoardofManagingDirectorsofUMHTheChiefRiskOfficerandthecentralRiskManagementunitarechargedbytheBoardofManagingDirectorswithensuringtheintegrityofthegroup-wideRMSQuarterlyriskreportsonUMHandthemaincompanieswithintheUnionInvestmentGrouparepreparedfortheirseniormanagementteamsandsupervisoryboardsaspartoftheregularreportingcycle

ThedetailsoftheRMSincludingallpoliciesandstrategiesaredocumentedintheUnionInvestmentGrouprsquosriskmanual

TheInternalAuditdepartmentcarriesoutanannualreviewoftheRMStoensurethatitisfullyoperational

ThefollowingsectionsdescribethekeycomponentsoftheRMSwithintheUnionInvestmentGroup

Analysisofrisk-bearingcapacityIn order to ensure that the Union Investment Group and its companies continue to survive as going concernstheirabilitytobearriskisregularlymonitoredaspartoftheeconomicriskandcapitalmanagementsystemThematerialtypesofriskarelimitedinaccordancewiththeriskstrategyandtheaggregateriskcoveravailableandarebackedbyriskcapitalThisinvolveslimitingthemaximumriskpermittedbyriskpropensityintheformofanoveralllimitinsuchawaythatthesurvivalofUMHandtheUnionInvestmentGroupasgoingconcernsisnotputatriskThisprocessincorporatestheeffectsofdiversificationbetweenthedifferentrisktypesIndependentexpertsuseindustrystandardsandmethodstocalculatetheriskcapitalrequirementsandmonitorthelimitsUnionInvestmentcarriesoutregularstresstestsinrespectofthemaintypesofriskThemethodsusedaresubjecttoanannualadequacyreview

Earlyshywarning systemDataonriskindicatorsisregularlycollectedandaggregatedinto13categoriesaspartoftheearly-warningsystemIfpredefinedtolerancelimitsareexceededorariskisclassedaselevatedanearlywarningistriggeredthatpromptsthoseresponsibleforriskmanagementtoconductacausalanalysisandimplementriskmitigationmeasuresTheearlywarningsgeneratedbythesystemthereforeguaranteethatcorrectiveactionwillbeinitiatedingoodtimeTheriskindicatorsystemessentiallycoversoperationalrisksbusinessrisksmarketrisksandrisksthatcanarisefromoutsourcedfunctionsInadditionthegrouphasanadhocreportingsystemfortheearlyidentifishycationofexceptionalrisksituationsthatrequireimmediateaction

Risk reportingTheBoardofManagingDirectorsofUMHreceivesquarterlywrittenreportsonchangesinthe riskpositioninthereportingperiodTheriskreportdescribesandassessestheoverallriskposition IthighlightsanycriticalareasofpotentialriskandifnecessaryrecommendsactiontoeliminatesuchpotentialriskTheBoardofManagingDirectorsusesthisreportasthebasisfortheinformashytionitforwardstotheSupervisoryBoardInadditiontotheseregularriskreportsanycriticalriskinformationispassedtotheBoardofManagingDirectorswithoutdelayandifnecessaryisalsoescalatedtotheSupervisoryBoard

37


2 Presentation of material risks 1

TheUnionInvestmentGrouprsquosriskstrategyappliestotherisksidentifiedandclassifiedasmaterialintheannualriskinventoryTheserisksareregularlymonitoredandmanagedwiththehelpoftheriskmanagementsystemonthebasisoftheguidancespecifiedintheriskstrategy

Operational riskOperationalriskisdefinedastheriskoflossesarisingfromhumanbehaviourtechnologicalfailureprocessorprojectmanagementweaknessesorexternaleventsLegalriskisincludedinthisdefinitionCompared to other risks operational risk is extremely important within the Union Investment Group becausethegrouprsquosactivitiesfocusontheprovisionofservicesforthirdpartiesandnotontheassumptionofriskonitsownaccount

OperationalriskisquantifiedcentrallybyDZBANKAGusinganeconomicportfoliomodelAriskcontributionofEUR1144millionwascalculatedforUMHasat31December2020(previousyearEUR1220million)ThelimitwasEUR141million(previousyearEUR141million)Theriskcontribushytiondidnotexceedthelimitatanypointduringthecourseoftheyear

TheadditionalriskindicatorsystemtriggeredwarningsforvariousriskindicatorsasintendedCorrectiveactiontofacilitateriskmanagementwasderivedfromtheseTherewerenoindicationsinthecourseoftheyearofanycriticalsituationslikelytorepresentarisktothegroupasagoingconcern

ThegrouprecordsalllossesofEUR1000(gross)ormorearisinginconnectionwithoperationalrisksinitsinternallossdatabaseIfsuchariskmaterialisesitcancausenotonlylossesbutalsodelaysorinterruptionstooperationsorevensubsequentlygiverisetoreputationalrisksTherecordingoflosseventsenablesUnionInvestmenttoanalyseoperationalrisksthathavebecomecriticalandidentifytrendsandconcentrationsTheactionsubsequentlyspecifiedtomitigatetheriskorpreventsuchriskfrommaterialisingcanthenalsoberefinedOverthecourseoftimethereareregularfluctuashytionsinthepatternoflossesastheprobabilityofrelativelylargelossesoccurringinindividualcasesisverylowLossesdidnotreachacriticallevelrelativetothelimitatanytimeduringthereportingperiod

Theriskprofileinconnectionwithoperationalrisksishonedaspartofanannualriskself-asshysessmentinwhichscenario-basedanalysesareappliedWorst-casescenariosplayakeyroleinthisprocessTheyprovideindicationsastohowthegroupshouldmanageextremeriskevents

The group has implemented various organisational precautions to mitigate or avoid the effectsofoperationalrisks

ForallmaterialbusinesstransactionsthereareguidelinesthatstipulatepeoplersquosresponsibilitiesandtheproceduresTheseguidelinesareregularlyreviewedbytheInternalAuditdivisiontoensurethattheyremainadequateanduptodate

TheUnionInvestmentGrouprsquospracticeofbundlingactivitiesandtheassociatedspecialisationatindividualstagesofthevaluechainfundamentallyhelptoreduceoperationalrisksForexampleITservicesandrelatedtasksareoutsourcedtoaspecialistITserviceproviderwithinthegroupBack-officeactivitiesarealsopooledintheorganisationalstructure

Inadditiontothepoolingoftasksinternallysomeservicesareoutsourcedtospecialistthird-partyprovidersThisisthecaseforexampleinIToperationsThemainITserviceprovidersforUMHareT-SystemsFiduciaampGADRatiodataandComputacenterAGampCooHGOtheractivitiessuchasininvestmentcustodybusinessandportfoliomanagementhavealsobeenoutsourced

AllplannedoutsourcingissubjecttoastandardisedoutsourcingprocesswhichalsoincludesananalysisoftherisksarisinginconnectionwiththeoutsourcingprojectconcernedDependingon theoutcomeoftheanalysisoutsourcedactivitiesandprocessesareincludedintheriskmanageshymentsystemExistingoutsourcingarrangementsaremonitoredandreportsareregularlysubmittedtoseniormanagementteamsAnynecessarycorrectiveactionisinitiatedwhereappropriate

VariousorganisationaltechnicalandHRmeasureshavebeenputinplacetoimprovethestabilityofprocessesandreducerisksTheseincludeaninternalcontrolsystemacentralisedbodyresponsibleforthepreventionofotherprosecutableactivitiestheseparationofdutiesallthewayuptotheleveloftheBoardofManagingDirectorsanappropriatetechnicalinfrastructuretheuseofsuitablyskilledandqualifiedemployeesandtheprovisionofadequateHRresources

WithintheUnionInvestmentGroupthestructureoftheremunerationsystemsistheresponsibilityofthegroupHRdivisionandisenshrinedintheremunerationpolicyTheaimoftheremunerationsystemsistorecognisetheemployeesrsquoachievementsaccordinglyandtoofferthemeffectiveperformanceincentivesOneoftheexpressprovisionsinthepolicyandsystemsisthattargetsleadingtotheassumptionofexcessiveriskmustnotbeagreedThishelpstominimiseoperationalrisksTheremunerationsystemsaredesignedsuchthattheycomplywiththeapplicableregulatoryrequirements

Insurancepolicieshavebeentakenouttocovercertainriskssomeofwhichcannotbemanagedorcontrolled

Theaimoftheplanistoreducetheimpactofexternalrisksthatcouldleadtoextremelyhighlossesordamageorevenjeopardisethecontinuedexistenceofthegroupasagoingconcern

Market riskMarketriskcomprisesmarketriskinthenarrowsenseofthetermandmarketliquidityrisk

Marketriskinthenarrowsenseofthetermisdefinedastheriskoflossesonfinancialinstrumentsorotherassetsarisingfromchangesinmarketpricesorintheparametersthatinfluenceprices(forexampleinterestrateriskspreadriskmigrationriskcurrencyriskequityriskfundpriceriskandassetmanagementrisk)Marketliquidityriskistheriskoflossarisingfromadversechanges inmarketliquidityforexampleasaresultofareductioninmarketdepthormarketdisruptionMarketliquidityriskisonlyofminorsignificance1 SourcesOwncalculationsandcalculationsbyDZBANKAGinlinewiththemethodsdescribedintheriskmanual

asat31December2020

38


FundpriceriskandassetmanagementriskareparticularlyimportantforUMHandtheUnionInvestmentGroupFundpriceriskarisesfromtheown-accountinvestingactivitiesundertakenbythecompanieswithinthegroupTheUnionInvestmentGroupadoptsaconservativeapproachtoitsown-accountinvestingactivitiesinvestingprimarilyinthegrouprsquosfundsHeightenedvolatilityinfinancialmarketscanleadtochangesinthevalueoffundassetswhicharethenreflectedintheincomestatementUMHusesaplanningcommitteetomonitorandmanageitsown-accountinvestinganddoesnotundertaketradingactivitiesspecificallyinpursuitofshort-termgain InadditiontofundpriceriskgeneralmarketriskalsoincludesinterestraterisksinconnectionwiththemeasurementofpensionobligationsThegeneralmarketriskiscalculatedcentrallybyDZBANKAG

AssetmanagementriskistheriskarisingfromcontractuallyagreedobligationstomakeadditionshyalcapitalpaymentstofundinvestorsorclientsifthereisashortfallinthefundsThisriskcategoryisrelevantbecausetheriskofsuchpaymentsmayariseinconnectionwithsubsidisedpensionplanproducts(RiesterpensionplanproductsparticularlyUniProfiRente)andguaranteefundsSuchadditionalpaymentstoinvestorswouldrepresentexpensesforthecompanyTheriskrelatingtothepensionproductsiscalculatedusingasimulationoftheexpectedfutureobligationstomakeadditionalcapitalpaymentsTheriskofpossibleadditionalcapitalpaymentsinconnectionwithguaranteefundsisquantifiedusingsuitablemodelsandstatisticalmethodsdependingonthestructureoftheproductconcernedTheperformanceofpensionplanproductsandguaranteefundsisconstantlymonitored

UMHrsquosmarketriskismanageddirectlyattheriskcapitalrequirementslevelandlimitedbyalimitcoveringboththefundpriceriskandassetmanagementriskaswellasthedecentralcapitalbufferThelatteramountstoEUR715million(previousyearEUR50million)andanticipatestheexpectedriseinriskcapitalrequirementsbasedontheadjustmentofassetmanagementriskmethodsplannedTheeconomicriskcapitalrequirementsforfundpriceriskandassetmanagementriskwerecalculatedasEUR2945millionasat31December2020(previousyearEUR1837million)Theriskcapitalrequirementsformarketriskincludingthecapitalbufferthusamountedto EUR3660millionasat31December2020(previousyearEUR2337million)Thelimitwas EUR5250million(previousyearEUR4630million)Theriskdidnotexceedthelimitatanypointduringthecourseoftheyear

EquityinvestmentriskEquityinvestmentriskisdefinedastheriskoflossesarisingfromnegativechangesinthefairvalueofthatportionoftheequityinvestmentsportfolioinwhichtherisksarenotcoveredbyothertypesofriskEquityinvestmentriskonlyincludesequityinvestmentsthatarenotintegratedintothedifferentiatedriskmeasurementprocesswithalook-throughapproachfortheindividualrisksIftheriskmaterialisestheremaybeaneedtorecogniseimpairmentlossestoreducethecarryingamountsoftheequityinvestmentsconcernedEquityinvestmentriskisquantifiedcentrallyby DZBANKAGAriskcontributionofEUR914millionwascalculatedforUMHasat31December2020(previousyearEUR692million)ThelimitwasEUR100million(previousyearEUR85million)Theriskcontributiondidnotexceedthelimitatanypointduringthecourseoftheyear

Business riskBusinessriskistheriskoflossesarisingfromearningsvolatilityforagivenbusinessstrategyandnotcoveredbyothertypesofriskInparticularthiscomprisestheriskthatasaresultofchangesinmaterialcircumstances(suchaseconomicconditionsproductenvironmentcustomerbehaviourmarketcompetitors)correctiveactioncannotbetakensolelyatanoperationalleveltopreventthelossesThecompanywouldthusreportanoperatinglossifsuchariskshouldmaterialise

TheeconomicriskcapitalrequirementsarecalculatedcentrallybyDZBANKAGusinganearnings-at-riskapproachasavalueatriskwithaone-yeartimeframeandaconfidencelevelof999 AriskcontributionofEUR0wasreportedforUMHasat31December2020(previousyear EUR0million)Basedonthelowbusinessriskandthecalculationsfromthelastreportingdatesthelimitfor2020wasalsozeroTheadditionalriskindicatorsystemtriggeredwarningsforvariousriskindicatorsasintendedCorrectiveactiontofacilitateriskmanagementwasderivedfromtheseTherewerenoindicationsinthecourseoftheyearofanycriticalsituationslikelytorepresentarisktothegroupasagoingconcern

Reputational riskReputationalriskisdefinedastheriskoflossesfromeventsthatdamageconfidenceparticularlytheconfidenceofclientsdistributorsinvestorsemployeesthelabourmarketthegeneralpublicandsupervisorsinthecompaniesoftheUnionInvestmentGrouporintheproductsandservicestheyoffer

ReputationalrisksaffectingthegrouporthegroupcompaniesmayarisefromthemanagementofinvestmentfundassetsIfreputationalrisksweretomaterialisethiscouldleadtoanoutflow ofclientfundsandthereforetolowerincomeinthefutureTheeffectsofreputationalrisksarefactoredintothemeasurementofbusinessriskandarecoveredbytheriskcapitaldeterminedforthelatter

LiquidityriskLiquidityriskisdefinedasthelossthatcanariseifinsufficientfundsareavailabletomeetpaymentobligationswhendue(liquidityriskinthenarrowsenseoftheterm)orifanynecessaryfundingcanonlybeobtainedonunfavourableterms(refinancingrisk)ThemainitemsthatcangiverisetoliquidityriskarethepaymentobligationsofthecompanieswithinthegroupIfliquidityrisksmaterialisethesettlementofpaymentobligationsbythegroupcompaniescouldbedelayedToavoidanysuchscenarioliquidityitemsaresubjecttocontinuousliquiditymanagementActiveplanningandcontrolofliquidityaimstoensurethatthecompaniescanmeettheirpaymentobligationsatalltimesTheliquidityoftheUnionInvestmentGroupwasnotinjeopardyatanytimeinthereportingperiod

Credit riskCreditriskistheriskofunexpectedlossesduetothedefaultofcounterpartiesUMHrsquoscreditriskprimarilyresultsfromown-accountinvestmentsinfundsbankdepositstimedepositsloansandadvancestoclientsandotherexposuresTheriskiscurrentlynotlimitedatUMHlevelbutisinstead

39


includedinthecentralcapitalbufferrequirementatDZBANKlevelCreditriskisquantifiedsemi-annuallybyUMHonthebasisofcapitalrequirementsaccordingtothestandardisedapproachtocreditriskThisusesallexposuresrelevanttocreditrisktocalculatethecapitalbufferThecentralcapitalbufferrequirementforcreditriskamountedtoEUR1085millionasat31December2020(previousyearEUR915million)

Longevity riskLongevityriskresultsfromcommitmentstopaypensionbenefitsonretirementTheriskisthatthevalueoftheprovisionsforpensionobligationscouldincreaseduetochangesinlifeexpectancyLongevityriskiscurrentlynotlimitedatUMHlevelbutisinsteadincludedinthecentralcapitalbufferrequirementatDZBANKlevelLongevityriskiscalculatedusingthecustomaryactuarialmethodsandmortalitytablesThecentralcapitalbufferrequirementforlongevityriskamountedtoEUR181millionasat31December2020(previousyearEUR144million)

Total riskTotalriskiscalculatedonthebasisoftheindividualrisktypesDiversificationeffectsaretakenintoaccountinaggregationThecentralcapitalbufferrequirementisaddedtothecorrelatedvaluebothonthelimitandtherisksideThetotalcapitalrequirementsamountedtoEUR6724millionasat31December2020(previousyearEUR5088million)TheoveralllimitwasEUR8608millionasat31December2020(previousyearEUR7755million)Thetotalcapitalrequirementsdidnotexceedtheoveralllimitatanypointduringthecourseoftheyear

RiskcoveriscalculatedquarterlyusingtheliquidationapproachinlinewithDZBANKspecificashytionsRiskcoveramountedtoEUR11458millionasat31December2020(previousyear EUR11061million)Utilisationofriskcoverbytheoveralllimitwas751asat31December2020(previousyear701)TheUnionInvestmentGrouprsquosrisk-bearingcapacitywasensuredatalltimesduringtheyear

3 Summary of the risk position in the year under review

TheresultsfromtheriskmonitoringprocesswerediscussedatregularmeetingsoftheRiskandDataQualityManagementCommitteeandsuitableactionwasinitiatedwhereappropriateTheBoardofManagingDirectorsofUMHwaskeptabreastofdevelopmentsrelevanttoriskbymeansofthequarterlyriskreportsandadhocnotificationofanycriticalissuesasnecessaryBasedonthesedetailstheBoardofManagingDirectorstookactiontomanagerisksandreportedtotheSupervisoryBoardofUMHontherisksituationIndividualhigh-risktrendsweremitigatedbyspecificcorrectiveactionstakenaspartoftheriskmanagementprocess

TheCOVID-19pandemicdominatedtherisksituationinthe2020financialyearHoweverthechangesintheworksituationdidnotbringaboutanincreaseinthemeasuredoperationalrisksnorwerelossesincurredinconnectionwiththebusinessactivitiesnecessitatedbythepandemshyicThevolatilemarketsledtoahigherrisklevelforpensionproductsHoweveroverthe2020financialyearasawholetherewerenoriskstoUMHortheUnionInvestmentGroupasagoingconcernTheanalysisofrisk-bearingcapacitydoesnothighlightanyobvioustrendsthatcouldnotbecounteredbythecorrectiveactiontakenTheUnionInvestmentGrouprsquosrisk-bearingcapacitywasensuredatalltimesAsdictatedbyprudentbusinesspracticeprovisionswererecognisedintheannualfinancialstatementstocoverbusinessandtaxrisksTheliquidityofUMHandthecompanieswithintheUnionInvestmentGroupwasneverinjeopardyatanypointintheyearunderreview

40


III Forecast

Please refer to the details in section B VI 32

UMH has set itself ambitious targets for the 2021 financial year

In view of the continued difficult conditions in the political and economic environment ndash effects of the COVID-19 pandemic as well as the associated extensive support measures and broad availability of a vaccine the UKrsquos withdrawal from the EU the persistent low interest-rate environment in Europe and large parts of the world ndash UMH intends to keep systematically taking advantage of opportunities for positive business performance

UMH is aiming to achieve a considerably higher level of assets under management by the end of the 2021 financial year New business is expected to see substantial growth The overall performance assumptions are expected to be slightly positive in the 2021 financial year

Net fee and commission income is expected to increase significantly in the 2021 financial year This is mainly due to the expectations of slightly higher volume-based income as a result of the considerably higher level of average assets under management as well as to the significantly increased income expectations for performance-based management fees

The financial result ndash comprising net interest income net income from investment securities and other net remeasurement income on financial instruments ndash is expected to rise sharply in the 2021 financial year This is mainly due to an anticipated substantial decrease in expenses from the measure-ment of guarantee pledges for investment products By contrast the one-time effect generated in the year under review in connection with the majority acquisition of ZBI Partnerschaftsholding GmbH no longer applies and a significant decrease in the value contribution from own-account investment is anticipated

Administrative expenses are expected to rise significantly again in the 2021 financial year after having been influenced by mostly one-off savings measures to secure earnings in the year under review UMHrsquos staff costs increased slightly while its general administrative expenses rose signifi-cantly primarily due to consulting and office expenses as well as expenses for public relationsmarketing Depreciation and amortisation expense is rising significantly mainly due to building costs and the first-time capitalisation of investments

A sharp decline is expected in the other operating result This is chiefly due to the significantly lower anticipated level of income from the remeasurement of provisions

Given the factors described above earnings before taxes for the 2021 financial year are expected to be slightly higher than in the current financial year The costincome ratio will increase slightly

E Non-financial statement 1 UMH is included in the non-financial corporate statement of DZ BANK AG Deutsche Zentral-Genos-senschaftsbank Frankfurt am Main and is therefore exempted from issuing its own non-financial statement The non-financial corporate statement forms part of DZ BANKrsquos sustainability report and is available in German on the following website wwwberichte2020dzbankde

The reference to the Non-Financial Report of DZ BANK AG is voluntary This does not affect the voluntary continuation of the previous sustainability reporting in accordance with the GRI standards outside of the management report



Hans Joachim Reinke Alexander LichtenbergChief Executive Officer Member of the Board of Managing Directors

Alexander Schindler Jens WilhelmMember of the Board Member of the Boardof Managing Directors of Managing Directors

1 In line with the requirements of German law the content of the declaration in accordance with Section 289b (2) sentence 3 of the German Commercial Code (HGB) is not audited

Consolidated financial statements 2020 financial year

Consolidated income statement 42

Statementofcomprehensiveincome 42

Consolidatedstatementoffinancialposition 43

Statementofchangesinequity 44

Statementofcashflows 45

Notestotheconsolidatedfinancialstatements 47


Shareholdersandexecutivebodiesof 124Union Asset Management Holding AG

42

Union Asset Management Holding AG 2020 annual report Consolidated financial statements (IFRS)

Consolidated financial statements (IFRS) of Union Asset Management Holding AG for the financial year from 1 January to 31 December 2020

Consolidated income statement for the financial year from 1 January to 31 December 2020

UMH Group Note 2020

EUR thousand

2019

EUR thousand

Net interest income [26] 6227 6255

Interest income and current 7215 8583

Interest expenses shy988 shy2328

Allowances for losses on loans and receivables

[27] -17 -54


6210 6201

Net fee and commission income [28] 1565889 1467998

Fee and commission income 2780044 2629086

Fee and commission expenses shy1214155 -1161088

Net income from investment securities [29] 43478 2443

Other net remeasurement income on financi-al instruments

[30] -83179 -43410


[31] 4603 33871

Administrative expenses [32] -919094 -909448

Other operating result [33] 31508 92531

Consolidated earnings before taxes 649415 650186

Income taxes [24] [34] -189224 -169674

Consolidated net income 460191 480512

Attributableto


450752 472330

Non-controlling interests 9439 8182

Statement of comprehensive income for the financial year from 1 January to 31 December 2020

UMH Group Note 2020

EUR thousand

2019

EUR thousand


Other comprehensive income -22178 -1858

Amounts reclassified to profit or loss -4608 1655

Exchangedifferencesoncurrencytranslationofforeignsubsidiaries

[35][36][56] ndash shy8

Shareofothercomprehensiveincomeofjointventuresandassociatesaccountedforusingtheequitymethod

[36][56] -4608 1663

Incometaxesrelatingtocomponentsofother comprehensive income

[36] ndash 0

Amounts not reclassified to profit or loss -17570 -3513

GainsandlossesfromequityinstrumentsforwhichthefairvalueOCIoptionwasexercised

[36][56] -116 1882

Actuarialgainsandlossesondefinedbenefitplans

-14793 -12676


[36] -2661 7281

Total comprehensive income 438013 478654

Attributableto


428842 470789


43


Consolidated statement of financial position as at 31 December 2020

Assets Note 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Cash reserve [9][37] 44 17

Loans and advances to banks [10] [38] 592026 541495

Loans and advances to customers [10] [39] 80211 109442

Asset derivatives [19] [40] ndash 28136

Investment securities [12] [41] 1743050 1503473

Shares in companies accounted for using the equity method

[13] [42] 61743 130187

Property plant and equipment [14] [43] 36708 25440

Intangible assets [15] [44] 306954 149300

Income tax assets [24] [45] 107334 90450

Other assets [46] 217419 217063

Right of use assets [47] 300359 102963

Assets held for sale [17][48] 39218 37740

Total assets 3485066 2935706

Equity and liabilities Note 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Liabilities to banks [18] [49] 30101 26884

Liabilities to customers [18] [50] 1525 1167

Liability derivatives [19] [51] 179852 96641

Provisions [20] [21] [52] 257382 228659

Income tax liabilities [24] [53] 59931 68506

Other liabilities [54] 865695 855183

Lease liabilities [55] 302421 104140

Equity [56] 1788159 1554526

Issued capital 87130 87130

Capital reserves 18617 18617

Retained earnings 1171839 919363

Fair value OCI reserve 20362 20496

Currency translation reserve 8203 12811

Consolidatednetprofit 450752 472330

Non-controllinginterests 31256 23779

Total equity and liabilities 3485066 2935706

44


Statement of changes in equity for the financial year from 1 January to 31 December 2020

UMH Group Note Issued capital Capital reserves

Retained earnings

Fair value OCI reserve

Currency translation

reserve

Reserve from assets held

for sale

Consolidated net profit

Equity before non-con-

trolling interests

Non-con-trolling

interests

Total equity

EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand

1 Jan 2019 87130 18617 843017 18701 11148 -3500 339059 1314172 24077 1338249

Consolidated net income ndash ndash ndash ndash ndash ndash 472330 472330 8182 480512

Other comprehensive income [56] ndash ndash -4997 1801 1663 shy8 ndash shy1541 -317 shy1858

Total comprehensive income ndash ndash -4997 1801 1663 -8 472330 470789 7865 478654

Acquisitiondisposalof nonshycontrolling interests

ndash ndash -11724 ndash ndash ndash ndash -11724 -764 shy12488

Changes in the consolidated group ndash ndash ndash ndash ndash 3508 ndash 3508 ndash 3508

Dividends paid [56] ndash ndash shy245998 ndash ndash ndash ndash shy245998 -7399 -253397

Appropriation to retained earnings ndash ndash 339059 ndash ndash ndash shy339059 ndash ndash ndash

Reclassificationswithinequity ndash ndash 6 -6 ndash ndash ndash ndash ndash ndash

31 Dec 2019 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526

1 Jan 2020 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526


Other comprehensive income [56] ndash ndash -17168 shy134 -4608 ndash ndash shy21910 -268 -22178

Total comprehensive income ndash ndash -17168 -134 -4608 ndash 450752 428842 9171 438013


ndash ndash -2577 ndash ndash ndash ndash -2577 shy99 -2676

Changes in the consolidated group ndash ndash ndash ndash ndash ndash ndash ndash 5388 5388


Appropriation to retained earnings ndash ndash 472330 ndash ndash ndash -472330 ndash ndash ndash

Reclassificationswithinequity [56] ndash ndash 0 0 ndash ndash ndash ndash ndash ndash

31 Dec 2020 87130 18617 1171839 20362 8203 ndash 450752 1756903 31256 1788159

45


UMH Group 2020

EUR thousand

2019

EUR thousand


Non-cash items included in consolidated net income and reconciliation to cash flows from operating activities

Depreciation amortisation impairment losses and reversals ofimpairmentlossesonassetsandmeasurementchangeson financialassetsandliabilities

143363 96788

Non-cashchangesinprovisionsanddeferredliabilities 771387 751302

Other nonshycash income and expenses 133064 19449

Gainsandlossesonthedisposalofassetsandliabilities -41799 3022

Otheradjustments(net) -6227 -6256

Subtotal 1459979 1344817

Cash changes in assets and liabilities arising from operating activities

Loansandadvancestobanks shy13985 229463

Loans and advances to customers 31702 shy25935

Other assets -177606 shy3999

Liabilitiestobanks 3221 7250

Liabilitiestocustomers 358 shy54

Assetliabilityderivatives -1467 -5227

Otherliabilities -560944 -640633

Interest and dividends received 27684 25937

Interest paid -2672 -3406

Income taxes paid shy190104 -169688

Cash flow from operating activities 576166 758525

UMH Group 2020

EUR thousand

2019

EUR thousand

Proceeds from the disposal of

Investment securities 613148 336286

Propertyplantandequipment 40 3

Intangibleassets 13 ndash

Payments for the acquisition of

Investment securities shy812080 -842966

Propertyplantandequipment shy13824 -7963

Intangibleassets -36381 -46518

Effects of changes in the consolidated group

Proceedsfromthesaleofconsolidatedcompanies ndash 91630

Cashpaidforthesaleofconsolidatedcompanies ndash shy1

Paymentsfortheacquisitionofconsolidatedcompanies shy85000 ndash

Cashobtainedfromtheacquisitionofconsolidatedcompanies 9 ndash

Cash flow from investing activities -334075 -469529

DividendpaymentstotheshareholdersofUMHAG and other shareholders

-207092 -253397

Paymentsfortheredemptioncomponentofleaseliabilities -27689 -24779

Changesincashfromothercapital -7283 shy10833

Cash flow from financing activities -242064 -289009

Cash and cash equivalents at the beginning of the year 17 30



Cashflowfromfinancingactivities -242064 shy289009

Cash and cash equivalents at the end of the year 44 17

Statement of cash flows for the financial year from 1 January to 31 December 2020

46



ThestatementofcashflowsshowsabreakdownofandchangesincashandcashequivalentsduringthefinancialyearItisbrokendownintooperatingactivitiesinvestingactivitiesandfinancingactivities

Cashflowsfromoperatingactivitiescomprisecashtransactions(cashinflowsandoutflows)inconnectionwithloansandadvancestobanksandcustomersotherassetsassetandliabilityderivativesliabilitiestobanksandcustomersandotherliabilitiesInterestanddividendpaymentstogetherwithcurrentincometaxpaymentsarealsoassignedtocashflowfromoperatingactivities

CashflowfrominvestingactivitiesshowscashtransactionsrelatingtoinvestmentsecuritiespropertyplantandequipmentandintangibleassetsThisitemalsoincludestheeffectsfromchangesintheconsolidatedgroup

Cashflowfromfinancingactivitiescomprisesproceedsfromcapitalincreasesproceedsfrom theutilisationofloansloanrepaymentsdividendpaymentsrepaymentofleaseliabilitiesandchangesincashrelatedtoothercapital

AstatementofcashflowsisnotparticularlymeaningfulasfarascompaniesintheassetmanagementsectorareconcernedThestatementofcashflowsfortheUMHGroupdoesnotreplaceliquidityandfinancialplanningnorisitusedasamanagementtool

47


[1] Principles of group accounting

UnionAssetManagementHoldingAG(UMHAG)istheholdingcompanyoftheUnionInvestmentGroupItisasubsidiaryofDZBANKAGDeutscheZentral-GenossenschaftsbankFrankfurtamMain(DZBANK)TheprimarypurposeofUMHAGrsquossubsidiariesjointventuresandassociatesistoissueandsellinvestmentfundsholdthesefundsinsafecustodyandprovideassociatedservicesTheUnionInvestmentGroupisalsothecentreofcompetenceforassetmanagementwithintheGenossenschaftlicheFinanzGruppe

TheregisteredofficeofUMHAGisWeissfrauenstrasse760311FrankfurtamMainGermanyThecompanywasenteredinthecommercialregisteroftheFrankfurtamMainLocalCourton 16June1999underHRB47289ThesharesinUMHAGarenotpubliclytraded

TheconsolidatedfinancialstatementsofUMHAGareincludedintheconsolidatedfinancialstatementsofDZBANKwhichinturnpreparestheconsolidatedfinancialstatementscoveringthegreatestnumberofentitiesincludedintheoverallgroupandisenteredinthecommercialregisteroftheFrankfurtamMainLocalCourtunderHRB45651DZBANKrsquosconsolidatedfinancialstatementsarepublishedintheFederalGazette

TheconsolidatedfinancialstatementsofUMHAGcomprisetheconsolidatedincomestatementthestatementofcomprehenshysiveincometheconsolidatedstatementoffinancialpositionthestatementofchangesinequitythestatementofcashflowsandthenotestotheconsolidatedfinancialstatementsTheycomprisetheseparatefinancialstatementsofUMHAGanditssubsidiaries(hereinafteralsoreferredtoastheldquoUMHGrouprdquoorldquoUnionInvestmentGrouprdquo)TheconsolidatedfinancialstatementshavebeenpreparedasattheendofUMHAGrsquosreportingperiod31December2020ThesubsidiariesincludedsharethesamereportingperiodThefullyconsolidatedinvestmentfundUIVario2whichhasafinancialyearending31Maywasincludedwithinterimfinancialstatementsasat31December2020

In accordance with standard international practice the consolishydatedincomestatementandconsolidatedstatementoffinancial

position are presented in a condensed and clearly structured formatincompliancewiththerequirementsofIAS1Statementoffinancialpositionitemsareshowninorderofliquidity

Theconsolidatedfinancialstatementshavebeenpreparedineuros(EUR)Unlessstatedotherwiseamountsarepresented inthousandsofeuros(EURthousand)toensurethattheconsolidatedfinancialstatementsareclearandcomprehensibleRoundingdifferencescanoccurintables

AllitemsintheconsolidatedfinancialstatementsarerecognisedandmeasuredundertheassumptionofthegoingconcernprincipleIncomeandexpensesarerecognisedusingtheaccrualmethodietheyarerecognisedintheperiodtowhichtheyrelate

WiththeexceptionofthecontractualmaturityanalysisasrequiredbyIFRS739(note[63])thegrosscarryingamountspursuanttoIFRS735I(note[59])andtheriskconcentrationoffinancialassetspursuanttoIFRS735M(note[58])thediscloshysuresonthenatureandextentofrisksarisingfromfinancialinstruments(IFRS731-42)areincludedintheriskreportinthegroupmanagementreportForinformationontheeffectsoftheCOVID-19pandemicpleaserefertosection3ofriskreport inthegroupmanagementreport

[2] Accounting policies

Theconsolidatedfinancialstatementsandthegroupmanageshymentreportforthefinancialyearfrom1Januaryto31Decemshyber2020havebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEuropeanUnion(EU)andtheadditionalrequirementsofGermancommershyciallawpursuanttoSection315e(1)oftheGermanCommercialCode(HGB)inconjunctionwithSection315e(3)HGB

ThefinancialstatementsofthecompaniesconsolidatedintheUMHGrouphavebeenpreparedusinguniformaccountingpolicies

Changes in accounting policies

First-time adoption of IFRS amendments in the 2020 financial year

ThefollowingamendmentstoIFRSswereadoptedforthefirsttimeintheUMHconsolidatedfinancialstatementsforthe2020financialyearbull AmendmentstoReferencestotheConceptualFrameworkin

IFRS Standardsbull AmendmentstoIFRS3ndashDefinitionofaBusinessbull AmendmentstoIAS1andIAS8ndashDefinitionofldquoMaterialrdquobull AmendmentstoIFRS9IAS39andIFRS7ndashInterestRateBenchmarkReform

bull AmendmentstoIFRS16LeasesndashCovid-19-RelatedRentConcessions

ThechangesincludedintheAmendmentstoReferencesto theConceptualFrameworkinIFRSStandardswererequiredfollowingtherevisionoftheconceptualframeworkbecausemanystandardsandotherstatementsfromtheIASBincludequotationsfromtheconceptualframeworkorreferencestoitInadditiontotheseamendmentssomeofwhichareeditorialchangestheamendmentstandardincludesclarificationsastowhichversionoftheconceptualframeworkappliesinspecificcasesDependingontheissueusersmustapplythe20012010or2018versionoftheconceptualframeworkWherenecessary adateofinitialapplicationfortheamendmentsisincludedwhichisstandardisedforfinancialyearsbeginningonorafter 1January2020TheimplementationoftheamendmentshadnoimpactontheUMHconsolidatedfinancialstatements

TheintentionoftheamendmentstoIFRS3ndashDefinitionof aBusinessistomakeiteasiertodistinguishacquisitionsofbusinessactivitiesfromacquisitionsofagroupofassetsTobeconsideredabusinessanacquisitionasdefinedbythenewdefinitionofldquobusinessrdquomustincluderesourcesandasubstantiveprocessthattogethercreatetheopportunitytogenerateoutputTheamendeddefinitionshallbeapplied toacquisitionsforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginning

Notes to the consolidated financial statements Basis of preparation

48


onorafter1January2020TherewasnoimpactontheUMHconsolidatedfinancialstatements

TheamendmentstoIAS1andIAS8ndashDefinitionofldquoMaterialrdquoaimtoimprovethedefinitionofmaterialitywithoutfundashymentallyalteringtheapplicationofthematerialityprincipleIn particular the amendments led to the new characteristic ofconcealinginformationwhichresultedintheomissionormisrepresentationofinformationTheamendmentsshallbeappliedprospectivelyforfinancialyearsbeginningonorafter1January2020TherewasnoimpactontheUMHconsolidatshyedfinancialstatements

TheamendmentstoIFRS9IAS39andIFRS7ndashInterestRateBenchmarkReformgranttemporaryreliefforhedgeaccountshyingpriortothereformofkeybenchmarkratessuchastheEURIBORLIBORandEONIA(IBORreform)Theexemptionsapplytohedgingrelationshipsdirectlyaffectedbyinterest ratebenchmarkreformAstherewasnohedgeaccounting intheUMHGroupinthefinancialyeartheseamendmentshadnoimpactontheUMHconsolidatedfinancialstatements

TheamendmentstoIFRS16COVID-19-RelatedRentConcessionsprovideoptionaltemporaryCOVID-19relatedoperationalreliefforlesseesbenefitingfromleasepaymentsholidayswithoutunderminingtherelevanceandusefulnessoffinancialinformashytionreportedbycompaniesTheapplicationofthisoptionalexemption means that these rent concessions are accounted forasiftheywerenotleasemodificationsInparticularthereportingentityisnolongerrequiredtoreviewallleasesorrental agreements to legally assess a relevant rent concession inlightoftherespectivecontractdesignandifapplicabletodeterminenewdiscountratesTheamendmentsareapplicabletofinancialyearsbeginningonorafter1January2020TheUMHGroupwillnotutilisetherelief

Endorsed IFRS amendments not applied

ThefollowingamendmentstoIFRSstandardswerenotappliedearlyvoluntarilybull AmendmentstoIFRS9IAS39IFRS7IFRS4andIFRS16ndashInterestRateBenchmarkReformndashPhase2

bull AmendmentstoIFRS4InsuranceContractsndashExtensionof theTemporaryExemptionfromApplyingIFRS9

TheamendmentstoIFRS9andIAS39followonfromtheamendshymentsof2019andtakeeffectwhenareportingentityreplacesaninterestratebenchmarkwithanalternativerateasaresultofthereformInadditionexpedientswereintroducedwithregardtoaccountingformodificationsrequiredasadirectconsequenceoftheIBORreformandmadeonaneconomicallyequivalentbasisUndertheseconditionsthechangeincontractualcashflowsisnottobeshownintheresultofthemodificationInsteadthepracticalexpedientofIFRS9B545allowssubsequentmeasurementonthebasisoftheupdatedeffectiveinterestrateandthusrecognitionoftheeffectonearningsovertheremainingterm

Hedgeaccountingcontinuesaftertransitiontothenewbenchshymarkratesbecauseachangeinthebenchmarkrateconstitutesonly a limited change in the documented hedging relationship andthereforedoesnotrequireitsdiscontinuationFurthermoretheamendmentsincludeminoradjustmentstoIFRS16andIFRS4aswellasadditionaldisclosurerequirementsinaccordancewithIFRS7

Theamendmentsareeffectiveandmandatoryforfinancialyearsbeginningonorafter1January2021butmaybeappliedearlieronavoluntarybasisTheUMHGroupisnotutilisingtheoptiontoapplytheseamendmentsearly

The amendments to IFRS 4 aim to address the temporary accountingconsequencesofthedifferenteffectivedatesof IFRS9FinancialInstrumentsandtheforthcomingIFRS17InsuranceContractsInparticulartheamendmentstoIFRS4extendtheexpirydateofthetemporaryexemptionfromapplyingIFRS9until2023inordertoaligntheeffectivedate ofIFRS9withthenewIFRS17TheEUadoptionregulation settheexpirydateoftheoptionaldeferraloftheapplication ofIFRS9forentitiesthatpredominantlyundertakeinsuranceactivitiesincludingtheinsurancesectorofafinancialconglomshyerateat1January2023Therearenoinsurancecompanies in the UMH Group so these amendments are not relevant to theUMHGroup

IFRS amendments not yet endorsed

ThefollowingnewaccountingstandardsissuedbytheIASBandthe listed amendments to several accounting standards have notyetbeenendorsedbytheEU

bull IFRS17InsuranceContractsbull AmendmentstoIFRS17InsuranceContractsbull AmendmentstoIAS1PresentationofFinancialStatementsndashClassificationofLiabilitiesasCurrentorNon-Current

bull AmendmentstoIFRS3BusinessCombinationsbull AmendmentstoIAS16PropertyPlantandEquipmentbull AmendmentstoIAS37ProvisionsContingentLiabilities

and Contingent Assetsbull Annual Improvements to IFRSs 2018 shy 2020 Cyclebull AmendmentstoIAS1PresentationofFinancialStatementsandIFRSPracticeStatement2ndashDisclosureofAccountingPolicies

bull Amendments to IAS 8 Accounting Policies Changes in AccountingEstimatesandErrorsndashDefinitionofAccountingEstimates

IFRS17InsuranceContractsreplacesIFRS4InsuranceContractsandpursuestheaimofaconsistentprinciple-basedaccountingforallinsurancecontractsItsetsoutprinciplesfortherecognishytionmeasurementpresentationanddisclosureofinsurancecontractsandrequiresthemeasurementofinsuranceliabilities atthecurrentsettlementvalueThemeasurementgenerallytakes place using a general model according to a 3shycomponent approachInsurancecontractswithatermoflessthanoneyearcanbeshownusingthesimplifiedallocationmethod(PremiumAllocationApproach)

TheamendmentstoIFRS17compriseacollectionofnumerousselective adjustments with which the IASB intends to help entities adoptthestandardwithoutsignificantlyreducingtheusefulnessoftheinformationprovidedTheamendmentsdeferredthedateofinitialapplicationofIFRS17bytwoyearsto1January2023

TheamendmentstoIAS1clarifythattheclassificationofliabilitiesascurrentornon-currentshouldbebasedonrightsthatareinexistenceattheendofthereportingperiodTheamendmentsareapplicableretrospectivelyforfinancialyearsbeginningonorafter1January2023NomaterialimpactontheUMHconsolidatedfinancialstatementsisexpected

TheamendmentstoIFRS3updatethestandardrsquosreferencestotherevisedIFRSconceptualframeworkTheseamendmentsalsostipulatethatfortherecognitionofacquiredliabilitieswithinthescopeofIAS37orIFRIC21thedefinitionsfoundtherearetobeappliedinsteadofthedifferingdefinitionsoftherevisedconceptualframework

49


TheamendmenttoIAS16PropertyPlantandEquipmentclarifiesthatproceedsfromsellingitemsproducedwithanitemofpropertyplantandequipmentwhilebringingthatassettotheconditionnecessaryforittobecapableofoperatingaretoberecognisedimmediatelyinprofitorloss

TheamendmentstoIAS37clarifywhatcostsareconsideredinassessingwhetheracontractisonerousThecostoffulfillingacontractcomprisesallcoststhatrelatedirectlytothecontractOnthebasisoftheAnnualImprovementsthe10testtobeperformedinaccordancewithIFRS9inassessingwhethertoderecogniseafinancialliabilitymayonlyincludefeespaidorreceivedbetweentheentityandthecreditorIfthetestformodifiedorexchangedfinancialliabilitiesresultsinextinguishshymentallcostsandfeesaretoberecognisedinprofitorloss Incontrastifthemodificationorexchangedoesnotresultinextinguishmentcostsandfeesareamortisedovertheremainingtermofthemodifiedliabilitybyadjustingthecarryingamountandeffectiveinterestrateprovidedtheydonotconstitutecompensationforthemodificationofthecashflowsfortheliability(egfeeascompensationforaninterestratereduction)ThelatteraretoberecognisedinprofitorlossinthemodificationentryTheamendmentstoIFRS3IAS16IAS37andtheimproveshymentstoIFRSsareapplicableforthefirsttimetofinancialyearsbeginningonorafter1January2022

TheamendmentstoIAS1PresentationofFinancialStatementsandIFRSPracticeStatement2ndashDisclosureofAccountingPoliciesstipulate that entities must disclose their main accounting policiesTheamendmentstoIAS1areapplicableforthefirsttimetofinancialyearsbeginningonorafter1January2023withearlyapplicationpermittedNomaterialimpactontheUMHconsolidatedfinancialstatementsisexpected

The amendments to IAS 8 Accounting Policies Changes in AccountingEstimatesandErrorsndashDefinitionofAccountingEstimatesclarifythedistinctionbetweenchangesinaccountingpoliciesandchangesinaccountingestimatesTheamendmentstoIAS8areapplicableforthefirsttimetofinancialyearsbeginningonorafter1January2023withearlyapplicationpermittedIntheUMHconsolidatedfinancialstatementstheclarificationswillbeobservedintheassessmentofaccountingmattersafterthedateofinitialapplication

TheaboveamendmentsarenotexpectedtohaveamaterialimpactontheUMHconsolidatedfinancialstatements

Thedatesoffirst-timeadoptionfortheapprovedIFRSamendshymentsaresubjecttotheirbeingendorsedinEUlaw

Voluntary changes in accounting policies

There were no voluntary changes in accounting and measureshymentpoliciesinthefinancialyear

[3] Consolidated group

In addition to UMH AG as the parent company the UMH consolidatedfinancialstatementsinclude20subsidiaries(previousyear15)inwhichUMHAGdirectlyorindirectlyholdsmorethan50ofthesharesorvotingrights15ofthesesubsidiaries(previousyearten)havetheirregisteredofficeinGermanywhilefive(previousyearfive)areheadshyquarteredinothercountries

21subsidiaries(previousyeartwelve)thatarenotmaterial toanunderstandingofthenetassetsfinancialpositionandresultsofoperationsoftheUMHGrouphavenotbeenconsolishydatedandarereportedasinvestmentsinsubsidiariesunderinvestmentsecurities

UnionInvestmentRealEstateDigitalGmbHHamburgwasfoundedon31March2020Thecompanyisfullyconsolidated

UMHAGacquiredafurther45ofthesharesinZBIPartnershyschafts-HoldingGmbHErlangenwitheffectasat29October2020andnowholds949ofthesharesPleaserefertothesectiononbusinessacquisitions(note[71])

TheconsolidatedfinancialstatementsofUMHAGdonotincludeanysubgroupsthatpreparetheirownsubgroupfinancialstatements

Inthefinancialyearoneinvestmentfund(previousyearone)wasincludedintheconsolidatedfinancialstatementsasaconsolidatedstructuredentityinaccordancewithIFRS10

Onejointventure(previousyearone)ndashoneofwhichisoutsideGermany(previousyearone)ndashisaccountedforusingtheequitymethod

Twoassociates(previousyearthree)ndashtwoofwhichareinGermany(previousyearthree)ndashareaccountedforusingtheequitymethod

Fourinvestmentfunds(previousyearfive)thatUMHAGcontrolswereheldforsaleasattheendofthereportingperiod

Acompletelistofthesubsidiariesjointventuresassociatesandinvestmentfundsincludedintheconsolidatedfinancialstateshymentscanbefoundinthelistofshareholdings(note[68])

[4] Principles of consolidation

SubsidiariesandinvestmentfundsareconsolidatedusingtheacquisitionmethodThismethodrequiresallofasubsidiaryrsquosassetsandliabilitiestoberecognisedatfairvalueattheacquisishytiondateoratthedateonwhichcontrolisacquired(note[67])

AnydifferencebetweenthecostandthefairvalueoftheassetsandliabilitiesisrecognisedasgoodwillunderintangibleassetsThecarryingamountofgoodwillistestedforimpairmentatleastonceayearormorefrequentlyifthereareanyindicationsofpossibleimpairmentAnimpairmentlossisrecognisedifgoodwillisfoundtobeimpaired

Anynegativegoodwillisrecognisedimmediatelyinprofitorloss

Intragroupassetsliabilitiesincomeandexpensesareeliminated infullProfitsorlossesresultingfromtransactionswithinthegroupareeliminatedunlesstheamountsconcernedareimmaterial

JointventuresandassociatesareaccountedforusingtheequitymethodandarereportedassharesincompaniesaccountedforusingtheequitymethodThecostoftheseequityinvestmentsandanygoodwill(amortisedinaseparateaccountinsubsequentyears)aredeterminedatthetimetheinvestmentsareincludedintheconsolidatedfinancialstatementsforthefirsttimeThesamerulesareappliedasforsubsidiaries

ThecarryingamountofequityisadjustedovertimebasedontheassociatesrsquoandjointventuresrsquofinancialstatementswhichhavebeenpreparedinaccordancewithlocalaccountingstandardsandreconciledtoIFRS

OccasionallytheUMHGrouphasholdingsoffundingprovidedforanumberofinvestmentfundsasaresultofwhichthegroupisinapositiontoexercisecontroloverthefundconcernedTheseholdingsareconsolidatedunlesstheysatisfythecriteriaspecifiedinIFRS5andarethereforetobereportedasassetsheldforsale

50


Investmentsinsubsidiariesjointventuresandassociatesthatareofnomaterialsignificanceandarethereforenotconsolishydatedandequitiesandothershareholdingsarerecognisedunderinvestmentsecuritiesandmeasuredatfairvalue

[5] Estimates

AssumptionsandestimatesmustbemadeinaccordancewiththerelevantfinancialreportingstandardsinordertodeterminethecarryingamountsofassetsliabilitiesincomeandexpensesrecognisedintheseconsolidatedfinancialstatementsTheseassumptionsandestimatesarebasedonpastexperienceplanningandexpectationsorforecastsoffutureevents

Assumptions and estimates are mainly used in determining thefairvalueoffinancialassetsandfinancialliabilitiesand inidentifyinganyimpairmentonfinancialassetsInadditionestimateshaveasignificantinfluenceondeterminingthecarryingamountsofgoodwillandintangibleassetsacquired inthecourseofbusinesscombinationsAssumptionsand estimatesalsohaveanimpactonthemeasurementofprovishysionsforemployeebenefitsandotherprovisionsinadditiontotherecognitionandmeasurementofincometaxassetsandincometaxliabilities

Fairvaluesoffinancialassetsandfinancialliabilities

IftherearenopricesavailableforcertainfinancialinstrumentsonactivemarketsthefairvaluesofsuchfinancialassetsandfinancialliabilitieshavetobedeterminedonthebasisofestimatesresultinginsomeuncertaintyEstimationuncertaintymainlyarisesiffairvaluesarecalculatedusingmeasurementmethodsinvolvingsignificantmeasurementparametersthatarenotobservableonthemarketThisaffectsbothfinancialinstrumentsmeasuredatfairvalueandfinancialinstrumentsmeasuredatamortisedcostwhosefairvaluesaredisclosedinthenotesTheassumptionsunderlyingthedeterminationof fairvaluesforthemeasurementparametersandmeasurementmethodsusedarepresentedinthenotesonfinancialinstrushymentsinnote[61]

Impairmentoffinancialassets

Whentestingfinancialassetsintheldquofinancialassetsmeasuredatamortisedcostrdquocategoryandtheldquofinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomerdquoandfinancing

leasereceivablesforimpairmenttheestimatedfuturecashflowsfrominterestpaymentstherepaymentofprincipalandtherecoveryofcollateralmustbedeterminedThisrequiresestimates and assumptions regarding the amount and timing offuturecashflowswhichinturngiverisetosomeuncertaintyFactorsinfluencingevidenceofimpairmentwhicharedetershyminedbydiscretionarydecisionsincludeforexampleeconomicconditionsthefinancialperformanceofthecounterpartyandtheamountofcollateralheldInadditionaspartofdeterminingevidenceofimpairmentforportfoliosparameterssuchasprobabilityofdefaultwhicharecalculatedusingstatisticalmodelsareincludedintheestimatesandassumptions

Goodwillandintangibleassets

Recognitionofgoodwillisessentiallybasedonanticipatedincomeandsynergyeffectsandonintangibleassetsthat cannotberecognisedresultingfromoracquiredinthecourseofbusinesscombinationsItscarryingamountisreviewed usingforecastfiguresbasedprimarilyonestimatesIdentifiableintangibleassetsacquiredinthecourseofbusinesscombinashytionsarerecognisedonthebasisoftheirfutureeconomicbenefitThisisassessedbythemanagementbymeansofappropriateandjustifiedassumptions

Provisionsforemployeebenefitsandotherprovisions

Uncertainty associated with estimates in connection with provisionsforemployeebenefitsprimarilyarisesfromthemeasurementofdefinedbenefitpensionobligationsonwhichactuarialassumptionshaveamaterialeffectActuarialassumptionsarebasedonalargenumberoflong-termforward-lookingfactorssuchassalaryincreasesannuitytrendsandaveragelifeexpectancy

Actualfuturecashoutflowsduetoitemsforwhichotherprovi-sionshavebeenrecognisedmaydifferfromtheforecastutilisationoftheprovisions

Themeasurementbasesandtheassumptionsandestimatesusedtodeterminetheamounttoberecognisedforprovisionsareshowninnote[52]

InJune2020themethodusedtoderivetheinterestrateforthemeasurementofpensionobligationswasrefinedonthebasisofachangeinBloombergrsquosbondclassificationsystemWithoutthis

refinementtheinterestratewouldbe33basispointslower Forinformationonsensitivitiestochangesinthediscountrate ofpensionobligationspleaserefertonote[52]

Incometaxassetsandliabilities

DeferredincometaxassetsandliabilitiesarecalculatedonthebasisofestimatesofthefuturetaxableincomeoftaxableentitiesInparticulartheseestimatesaffectanyassessmentoftheextent towhichitwillbepossibletoutilisedeferredincometaxassetsinfutureThecalculationofcurrentincometaxassetsandliabilitiesforthepurposesofpreparingHGBfinancialstatementsstillrequiresestimatesofdetailsrelevanttoincometax(note[24])

EstimatewhethervariableconsiderationswithinthemeaningofIFRS15arelimited

Thefeefortheassetmanagementservicewhichconsistsofcurrentremunerationpartsofthelump-sumremunerationandtheperformance-relatedmanagementfeeshouldberecogshynisedovertheterminequalamountsforthetermintervalsof therangeofservicesSincetheongoingremunerationandtheflat-ratefeearevariablefeesdependingontheassetsundermanagementthisuncertaintyisrelatedtothetotalamountoftheremunerationdueoverthetermoftheinvestmentfundoranassetmanagementagreementThedevelopmentofassetsundermanagementdependsonthedevelopmentofthefairvalueoftheassetsundermanagementonpaymentsmadeorpaidouttoshareholdersordepositsordisbursementsonassetmanagementmandatesOwingtotheregulationsofIFRS15forthelimitationoftherecognitionofvariableconsiderationthevariableremunerationinthiscaseshouldnotbefullyincludedinthetransactionpricefromthebeginningItisincludedonlyatthe time in which the uncertainty is overcome which is the case ateachrespectivesettlementdate(usuallymonthly)

Ifperformance-basedremunerationcomponentshavebeenagreedtheyareinfluencedamongotherthingsbymarketdevelopmentsandthusbyfactorsbeyondthecompanyrsquoscontrolSincethisincomeissubjecttoalargenumberandawiderangeofpossibleoutcomesduetosignificantrisksofadownturnonthecapitalmarketswhichcannotbeexcluded itcanonlythenbeincludedintheamountofthetransactionpricesubjecttotheprovisionsofIFRS15onthelimitationof therecognitionofvariableconsiderationiftheoutperformancecriteriaagreedforadefinedbenchmarkandtheagreed

51


assessmentperiodhavebeenmetasthereisnosignificantriskofcancellationupuntilthisdate

IfinvestmentcompensationhasbeenagreedforpropertyfundsorotherAIFpropertyfundsitcanonlythenbeincludedintheamountofthetransactionpriceduetotheprovisionsofIFRS15onthelimitationoftherecognitionofvariableconsiderationifbenefitsandencumbranceshavebeentransferredorinthecaseofportfoliodevelopmentsassoonaspaymentsintheinvestshymentfundsaresettledaccordingtotheconstructionprogress

[6] Financial instruments

AllfinancialassetsandfinancialliabilitiesincludingallderivashytivesarerecognisedinthestatementoffinancialpositioninaccordancewithIFRS9Allfinancialinstrumentsaremeasured atfairvalueonfirst-timerecognitionTheamountsinitiallyrecognisedforfinancialassetsandfinancialliabilitiesnotmeasuredatfairvaluethroughprofitorlossincludetransactioncostsdirectlyattributabletotheacquisitionoftheassetsorliabilitiesconcernedThesubsequentmeasurementoffinancialassetsandfinancialliabilitiesdependsontheIFRS9categorytowhichtheyareassignedonadditionForfinancialassetsthecategoryisdeterminedbythebusinessmodelandthefulfilshymentofthecashflowcriterion

Categoriesoffinancialinstruments

Financial assets at fair value through profit or loss (fair value PL)

Financial assets that are not measured at amortised cost or atfairvaluethroughothercomprehensiveincomeshouldbecategorisedasldquofinancialassetsatfairvaluethroughprofit orlossrdquoThiscategorycomprisesthesubcategoriesbelow

Financialassetsmandatorilymeasuredatfairvaluethroughprofitorloss

ThesubcategoryldquofinancialassetsmandatorilymeasuredatfairvaluethroughprofitorlossrdquoincludesfinancialassetsthatdonotmeetthecashflowconditionunderIFRS9orthatareacquiredwiththeintentiontosubsequentdisposalinthenearfutureForthispurposethesefinancialassetsmustbepartofaportfolioofidentifiedfinancialinstrumentsthataremanagedtogetherandforwhichthereisevidenceofarecentpatternofshort-term

profit-takingortheymustbederivativefinancialinstrumentsthatarenotdesignatedashedgesineffectivehedgingrela-tionships

TheUMHgroupassignsunitsininvestmentfundsandpartoftheloansandadvancestobankstothiscategoryThiscategoryalsoincludesdebtinstrumentsthatalsocomeundertheldquoholdtocollectrdquoorldquoholdtocollectandsellrdquobusinessmodelbutthatdonotfulfilthecriterionforcashflowsDerivativefinancialinstrumentsalsocomeunderthiscategory

Financialassetsfromcontingentconsiderationthroughbusinesscombinations

ThissubcategoryincludescontingentconsiderationsthattheacquirerhasclassifiedasfinancialassetsinabusinesscombishynationoranalogousapplicationofIFRS3fortransactionsbasedonIAS28

TherearecurrentlynocasesofthisbeingappliedattheUMGroup

Financialassetsdesignatedatfairvaluethroughprofitorloss(fairvalueoption)

Financialassetsclassifiedatfairvaluethroughprofitorlossmaybeassignedtothesubcategoryldquofinancialassetsatfairvaluethroughprofitorlossrdquoiftheyareusedtoeliminateorsubstantiallyreducerecognitionormeasurementinconsistencies(accountingmismatches)

ThefairvalueoptionwasnotusedwithintheUMHGroup

Financial assets measured at fair value through other comprehensive income (fair value OCI)

Thecategorycomprisesthesubcategoriesbelow

Financialassetsmandatorilymeasuredatfairvaluethroughother comprehensive income

Allocationtothiscategorytakesplaceifthefinancialasset isheldwithintheframeworkofabusinessmodelwhoseobjecshytiveisboththerecognitionofcontractualcashflowsandthesaleoffinancialassetsInadditionthecontractualtermsofthefinancialassetonspecifieddatesmustresultincashflows

thataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding

DuetothecashflowconditionsthesefinancialassetsconsistexclusivelyofdebtinstrumentsTheyaremeasuredatfairvalueInterestincomeimpairmentlossesandeffectsfromthecurrencytranslationreserveshouldberecognisedinprofitorlossDifferencshyesbetweenamortisedcostandfairvaluearerecognisedin othercomprehensiveincomeTheamountsrecognisedinothercomprehensiveincomemustbereclassifiedtoprofitandloss(recycling)

IntheUMHGroupnodebtinstrumentsaremeasuredatfairvaluethroughothercomprehensiveincomeasattheendof thereportingperiod

Financialassetsdesignatedatfairvaluethroughother comprehensiveincome(fairvalueOCIoption)

Forequityinstrumentstheirrevocableoptionofdesignation isrecognisedasldquofinancialassetsatfairvaluethroughprofitorlossrdquo(fairvalueOCIoption)ExceptfordividendsnottransferredtocapitalchangesinfairvaluearerecognisedinconsolidatedothercomprehensiveincomeCumulativeconsolidatedothercomprehensiveincomeisnotsubsequentlyreclassifiedtotheincomestatement(recycling)forexampleduetothedisposaloftheinstrumentAfterdisposaloftheseequityinstrumentstheaccumulatedothercomprehensiveincomeisreclassifiedtoretainedearningsThegeneraloptiontoexercisethefairvalueOCIonlyappliestoequityinstrumentsthatarenotheldfortradingorarecontingentconsiderationrecognisedbyanacquirerinabusinesscombinationunderIFRS3

ForeachnewadditionofanequityinstrumenttheUMHGroupcheckswhethertheoptionshouldbeexercisedTheoptioniscurrentlybeingexercisedforallequityinstruments

Financial assets measured at amortised cost

Itisclassifiedinthiscategoryifthefinancialassetisheldwithin abusinessmodelwhoseobjectiveistoholdfinancialassetsfortherecognitionofcontractualcashflowsThecontractualtermsofthefinancialassetresultsincontractualcashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding(so-calledcashflowcondition)Financialassetsinthiscategoryconsistexclusivelyofdebtinstrumentsduetothe

52


cashflowconditionTheyaremeasuredatamortisedcostusingtheeffectiveinterestratemethodInterestincomeimpairmentlossesandeffectsfromthecurrencytranslationreserveshould berecognisedinprofitorloss

TheUMHGroupassignsthemajorityofitsloansandadvancestobanksandcustomersandtradereceivablesrecognisedunderotherassets

Financial liabilities measured at fair value through profit or loss (fair value PL)

Financialliabilitiesthatarenotmeasuredatamortisedcostshouldbecategorisedasldquofinancialassetsmeasuredatfair valuethroughotherprofitorlossrdquoThecategorycomprises thesubcategoriesbelow

Financialliabilitiesmandatorilymeasuredatfairvaluethroughprofitorloss

Thesubcategoryldquofinancialliabilitiesmandatorilymeasured atfairvaluethroughprofitorlossrdquoincludesfinancialliabilitiesthatdonotmeetthecashflowconditionunderIFRS9orthatareacquiredwiththeintentiontorepaymentinthenearfutureForthispurposethesefinancialliabilitiesmustbepart ofaportfolioofidentifiedfinancialinstrumentsthataremanagedtogetherandforwhichthereisevidenceofarecentpatternofshort-termprofit-takingortheymustbederivativefinancialinstrumentsthatarenotdesignatedashedgesineffectivehedgingrelationships

IntheUMHGrouponlyderivativefinancialinstrumentsarerequiredtobemeasuredatfairvaluethroughprofitorloss onaregularbasis

Financialassetsfromcontingentconsiderationthroughbusinesscombinations)

Thissubcategoryincludescontingentconsiderationsthat theacquirerhasclassifiedasfinancialliabilitiesinabusinesscombinationoranalogousapplicationofIFRS3fortransacshytionsbasedonIAS28

Financialliabilitiesmeasuredatfairvaluethroughprofitorloss(fairvalueoption)

Financialliabilitiesmeasuredatfairvaluethroughprofitorlossmaybeassignedtothesubcategoryldquofinancialliabilitiesatfairvaluethroughprofitorlossrdquoiftheyeliminateorsignificantlyreducerecognitionormeasurementinconsistencies(accountingmismatches)whicharemanagedasaportfoliobasedonthefairvalueoroneormoreembeddedderivativessubjecttoseparation

NofinancialliabilitiesaremeasuredatfairvaluethroughprofitorlossintheUMHGroup

Financial liabilities measured at amortised cost (AC)

Financialliabilitiesaretobecategorisedasldquofinancialliabilitiesmeasuredatamortisedcostrdquoforsubsequentmeasurement Thisexcludesldquofinancialliabilitiesmeasuredatfairvaluethroughprofitorlossrdquofinancialliabilitiesthatarisewhenatransferof afinancialassetdoesnotmeetthederecognitionrequirement ortheaccountingisbasedonitscontinuinginvolvementfinancialguaranteescreditcommitmentswithabelow-marketinterestrateandcontingentconsiderationthatisrecognisedby apurchaserinabusinesscombinationinaccordancewithIFRS3

TheUMHGroupallocatesallitsliabilitiestobanksandcustomshyersandrecognisestradepayablesunderotherliabilitiesinthestatementoffinancialposition

Initialrecognitionandderecognitionoffinancialassetsandliabilities

DerivativesareinitiallyrecognisedonthetradedateRegularwaypurchasesandsalesofnon-derivativefinancialassetsareaccountedforatthesettlementdateChangesinfairvaluebetweenthetradedateandsettlementdatearerecognised inaccordancewiththecategoryofthefinancialinstrument

DifferencesbetweentransactionpricesandfairvaluesarerecognisedinprofitorlossoninitialrecognitionifthefairvalueequalsthequotedmarketpriceforanidenticalassetorliabilityinanactivemarketorisbasedonameasurementmethodthatusesdataonlyfromobservablemarketsIfthefairvalueatthetimeofacquisitionisderivedfromtransactionpricesandthisisalsousedasameasureinthesubsequentmeasurementchangesinthefairvalueareonlyrecognisedinprofitorlossiftheycanbeattributedtothechangeinobservablemarketdataDifferencesnotrecogshyniseduponinitialrecognitionaredistributedoverthetermoftherelevantfinancialinstrumentsandrecognisedaccordingly

FinancialassetsarederecognisedifthecontractualrightstocashflowsfromthemexpireoraretransferredtothirdpartiesandtherearenosignificantopportunitiesandrisksassociatedwiththefinancialassetsIfthederecognitioncriteriaforfinancialassetsarenotmetthetransfertothirdpartiesisaccountedforassecuredborrowingFinancialliabilitiesarederecognisedifthecontractualobligationshavebeensettledcancelledorexpired

Impairmentlossesandreversalsofimpairmentlossesonfinancialassets

Impairment losses in accordance with IFRS 9 apply only to financialassetsthataredebtinstrumentsEquityinstrumentsarenotwithinthescopeofIFRS9Impairmentlossesmustberecognisedforthefinancialassetsbelowbull FinancialassetspursuanttotheIFRS9categoryldquofinancialassetsmeasuredatamortisedcostrdquo

bull Financialassets(onlydebtinstruments)assignedtotheIFRS 9categoryldquofinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomerdquo

bull Opencreditcommitmentsforacurrentlyexistinglegalobligationtolend(irrevocablecreditcommitments)ifthesearenotmeasuredatfairvaluethroughprofitandloss

bull Financialguaranteesiftheyarenotmeasuredatfairvaluethroughprofitorloss

bull Leasereceivablesbull TradereceivablesandcontractassetsthatcomeunderthescopeofIFRS15

Allfinancialassetsareinitiallyassignedtostage1Purchased ororiginatedcredit-impairedassets(POCI)areanexception12shymonth expected credit losses are the minimum risk assessshymentmeasurementforstage1assets

Attheendofeachreportingperiodthecreditriskforeachinstrument is determined and checked to see whether it has significantlyincreasedsincetheendofthepreviousreportingperiodFordebtinstrumentsimportantobjectiveevidenceincludesfinancialdifficultiesonthepartoftheissuerordebtordelayordefaultoninterestpaymentsorrepaymentsofprincipalfailuretocomplywithancillarycontractuallyagreedarrangeshymentsorthecontractuallyagreedprovisionofcollateralasignificantdowngradingincreditratingorissueofadefaultratingMacroeconomicfactorsarenottakenintoaccounthereasthevolumeofreceivablesthatarenotduedailyisofminorimportance

53


Assetsforwhichthecreditriskhasincreasedsignificantlysinceinitialrecognitionbutthereisnotanyobjectiveevidencethattheassetsareimpairedareassignedtostage2Theimpairmentfortheseassetsshouldbemeasuredattheamountofthelifetimeexpectedcreditlosses

Itcansimplybeassumedthatthecreditriskonafinancialinstrumenthasnotincreasedsignificantlysinceinitialrecogni-tionifthefinancialinstrumentisdeterminedtohavelowcreditriskatthereportingdate(lowcreditriskexemption)ForloansandthusalsoforpromissorynoteloanstheapplicationoflowcreditriskexemptionintheUMHGroupisexcludedHoweversecuritieswithalowdefaultriskarenotsubjecttoanexaminashytionforasignificantincreaseindefaultriskInvestmentgradesecuritiesareassignedtostage1

Financialassetsthatareclassifiedasimpairedonthebasisofobjectiveevidencemustbeassignedtostage3Theimpairshymentfortheseassetsshouldbemeasuredattheamountofthelifetimeexpectedcreditlosses

Purchasedororiginatedcredit-impairedfinancialassets(POCI)mustinitiallyberecognisedattheircarryingamountless theexpectedcreditlossesoverthefulltermandamortisedaccordinglyatarisk-adjustedeffectiveinterestrateAsattheendofthereportingperiodonlythecumulativechangesinlifetimeexpectedcreditlossessinceinitialrecognitionshallberecognisedasalossallowanceTheseassetsarenotexpectedtotransferbetweenstages

TheUMHGroupusesastandardiseddefaultdefinitiontoassessthecredit-impairedstatusofafinancialassetThedefinitionofdefaultisbasedonArticle178CRRThisdefinitionstatesthatadefaulteventhasoccurredafter90daysofdefault

Ifafinancialassetismorethan30dayspastduewedeemthedefaultrisktobesignificantlyincreasedUnratedreceivables arebasedonexpertassessmentsOtherwisetheratingofthecounterpartyavailableisincluded

Forstage1and2assetsheldunderIFRS9rsquoslsquogeneralapproachrsquoexpectedcreditlossesarecalculatedcollectivelyDiscountedcashflowscenariosareusedforstage3assets

Incalculatingtheexpectedcreditlossesthederivationoftheexpectedprobabilityofdefaulttobestatedisbasedonpublicly

availableratingsfromMoodyrsquosSampPorFitchTheavailableexternalratingsaremappedtoamasterscale(VRNote)specifiedbyDZBANKMatriceswithspecificprobabilities ofdefaultareusedforeachoftheratinggradescontainedthereinIfitisdeterminedattheendofthereportingperiodthatthereisnolongerasignificantincreaseinthedefaultriskcomparedwithpreviousreportingdatestheaffectedfinancialassetswillbetransferredbacktostage1andriskprovisionsreducedtotheleveloftheexpected12-monthcreditlossFor areturnbackfromstage3thedefaultstatusisreversedinaccordancewiththeregulatorydefinitiononlyafteracorreshyspondingperiodofgoodconduct

ThesimplifiedapproachinaccordancewithIFRS95515isusedattheUMHGroupwherebyforreceivableswithinthescopeofapplicationofIFRS15andothertradereceivablestheexpectedcreditlossovertheentiretermisinitiallydetermined

ForreceivablesinthescopeofthesimplifiedapproachtheprovisionratestobeappliedarebasedonthepastexperienceoftheUMHGroupCommissionreceivablesarepredominantlycurrentreceivablesinaccordancewithIFRS15thecarryingamountofwhichintheexperienceoftheUMHGroupisnotinfluencedbymacroeconomicfactors

Direct impairment losses directly reduce the carrying amount ofassetsDirectwrite-downsarerecognisedifitisexpectedthatthereceivablehasbecomeuncollectibleThesearegenerallyinsignificantminimumamounts

Ifsignificantcontractualadjustmentsaremadetofinancialassets these are derecognised and initially recognised as a new assetToassesswhetherthereisasubstantialmodificationaquantitativecriterionisusedinadditiontovariousqualitativecriteriaThethresholdhereisachangeinthepresentvalueof therenegotiatedcontractualcashflowscomparedtothepresentvalueoftheoriginalcontractualcashflowswhichissignificant atmorethan10WeconsiderasignificantmodificationtobeappropriateifitinvolvesoneofthefollowingtypesofcontractushyaladjustmentsCurrencyconversioninclusionoradjustmentofequityconversionrightschangeofdebtorinclusionofcollateralagreementswithwhichthecashflowcriterionofIFRS9isnolongermetWealsoconsiderasignificantmodificationtobeappropriateifothercontractualadjustmentstakingintoaccounttheoverallcircumstanceshavechangedthenatureofafinancialassettosuchanextentthatanewfinancialinstrumentexists

withinthemeaningofIFRS9Forimpairedassets(stage3) theregulationsforPOCIapplyIfcontractualadjustmentsoffinancialassetshavenomaterialimpacttheyarereviewedfor asignificantincreaseindefaultriskcomparedtotheoriginaldateofacquisitionInthecaseofmodificationsthatdonotresultinthederecognitionofthefinancialasset(non-significantcontractualadjustments)theadjustmentofthecontractuallyagreedcashflowsisrecognisedastheresultofthemodificationintheamountofthedifferencebetweentheoriginallyagreedcashflowsandthemodifiedcashflowsdiscountedwiththeoriginaleffectiveinterestrate

Inthecurrentreportingperiodnochangeshavebeenmade totheassumptionsforthecalculationortheinputfactorsofexpectedcreditlosses

Embeddedderivatives

Anembeddedderivativeisacomponentofahybridcontractthatalsoincludesanon-derivativefinancialinstrument(host)ndashwiththeeffectthatsomeofthecashflowsofthecombinedinstrumentvaryinawaysimilartoastand-alonederivative Aderivativethatisattachedtoafinancialinstrumentbutiscontractuallytransferableindependentlyofthatinstrumentorhasadifferentcounterpartyisnotanembeddedderivativebutaseparatefinancialinstrument

Ifahybridcontractcontainsahostcontractthatisafinancial assetwithinthescopeofIFRS9therequirementsgoverningthecategorisationoffinancialassetsapplytotheentirehybridcontract

IfahybridcontractcontainsahostcontractthatisnotafinancialassetwithinthescopeofIFRS9aderivativeshouldbeseparatedfromthehostcontractandaccountedforseparatelyifbull theeconomiccharacteristicsandrisksofthederivativeare

not closely related to the economic characteristics and risks ofthehostcontract

bull the separate instrument with the same terms as the derivative wouldmeetthedefinitionofaderivativeand

bull thehostcontractisnotmeasuredatfairvaluethroughprofitorloss

IftheserequirementsarenotmetcumulativelytheembeddedderivativemaynotbeseparatedfromthehostcontractIfanembeddedderivativeisseparatedthehostcontractshallbeaccountedforinaccordancewiththeappropriateStandards

54


IfacontractcontainsoneormoreembeddedderivativesandthehostcontractisnotafinancialassetwithinthescopeofIFRS9theentirehybridcontractcanbedesignatedatfairvaluethroughprofitorlossThisdoesnotapplytocasesinwhichembeddedderivativesonlyinsignificantlychangethecontractualcashflowsorifwheninitiallyassessingcomparablehybridinstrumentswithlittleornoanalysisitisapparentthatembeddedderivativesshouldbeseparated

Classesoffinancialinstruments

Theclassesoffinancialinstrumentscorrespondtolineitemsinthestatementoffinancialposition(note[57])

[7] Fair value measurement of financial instruments

Fair value is the price at which an orderly transaction to sell an assetortotransferaliabilitywouldtakeplacebetweenmarketparticipantsatthemeasurementdateThefairvalueoffinancialinstrumentsisdeterminedonthebasisofmarketpricesorobservablemarketdataattheendofthereportingperiodorbyusingrecognisedmeasurementmodelsInvestmentfundunitsare measured at the redemption price less a redemption charge ifsuchachargeisstipulatedinthecontractualtermsIfsecuritiesandderivativescanbetradedwithsufficientliquidityonactivemarketsiemarketpricesareavailableortradablepricescan beestablishedbyactivemarketparticipantsthentheseprices areusedasthebasisfordeterminingfairvalueIfnopricesareavailablefromliquidmarketsfairvalueisdeterminedusingtechniqueswhoseparametersarebasedonobservablemarketdataFinancialinstrumentswithshortremainingtermsorrepayableondemandaremeasuredattheirnominalamountThese instruments include cash in hand current account credit balancesandtradereceivables

[8] Currency translation

AllmonetaryassetsandliabilitiesaretranslatedattheclosingrateattheendofthereportingperiodintotherelevantfunctionalcurrencyoftheentitiesintheUMHGroupThetranslationofnon-monetaryassetsandliabilitiesdependsonthewayinwhichtheseassetsandliabilitiesaremeasuredIfnon-monetaryassetsare measured at amortised cost they are translated using the historicalexchangerateNon-monetaryassetsmeasuredatfairvaluearetranslatedattheclosingrateIncomeexpensesgainsand losses are translated at the prevailing closing rate when they

arerecognisedeitherinprofitorlossorinothercomprehensiveincome

IfthefunctionalcurrencyofsubsidiariesincludedinthefinancialstatementsoftheUMHGroupisdifferentfromthegrouprsquosreportingcurrency(euro)allassetsandliabilitiesaretranslatshyedattheclosingrateEquityistranslatedatthehistoricalrateTheresultingdifferenceisreportedinthecurrencytranslationreserveIncomeandexpensesaretranslatedattheaveragerateInmostcasesthefunctionalcurrencyoftheentitiesincludedintheconsolidatedfinancialstatementsistheeuroiethegrouprsquosreportingcurrency

[9] Cash reserve

CashandcashequivalentsarecashinhandandbalanceswithcentralbanksandothergovernmentinstitutionsCashandcashequivalentsaremeasuredattheirnominalamount

[10] Loans and advances to banks and customers

Loansandadvancestobanksandcustomersincludeallreceiv-ablesthatarecategorisedeitherasldquofinancialassetsmeasured atamortisedcostrdquoldquofinancialassetsatfairvaluethroughprofit orlossrdquoorldquofinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomerdquo

LoansandadvancestobanksandcustomersaremeasuredatamortisedcostusingtheeffectiveinterestmethodiftheymeetthecashflowcriterionofIFRS9andaremanagedwithintheldquoholdtocollectrdquobusinessmodelThefairvalueoptionwasnotusedbytheUMHGroupforreceivables

Interestincomefromloansandadvancestobanksandcustomersisrecognisedunderinterestincomefromlendingandmoneymarketoperations

Premiums discounts and transaction costs are recognised in the incomestatementundernetinterestincomeDeferredinterestonreceivablesandpremiumsanddiscountsarereportedwiththerespectiveloansandreceivablesunderthecorrespondingstatementoffinancialpositionitemsPremiumanddiscountamountsareallocatedoverthetermoftheloanorreceivableusingtheeffectiveinterestmethod

[11] Allowances for losses on loans and receivables

AllowancesforlossesonloansandreceivablesforcashreserveloansandadvancestobanksandcustomersfinancialassetsandotherassetswhicharecategorisedatamortisedcostorclassifiedasfinanceleasesaredeductedfromassetsasaseparateiteminthestatementoffinancialpositionAdditionstoandreversalsofriskprovisionsforthesefinancialpositionitemsarerecognisedinprofitorlossasallowancesforlosses

Uncollectibleloansandreceivablesarewrittenoffimmediatelyanysubsequentreceiptsfromloansandreceivablesalreadywrittenoffarerecognisedintheincomestatement

LoanlossprovisionsalsoincludechangestoprovisionsforfinancialguaranteesAdditionstoandreversalsofprovisionsforfinancialguaranteesarealsorecognisedthroughprofitorlossinallowancesforlossesonloansandreceivables

[12] Investment securities

Investmentsecuritiescomprisebearerbondsandotherfixedincomesecuritiesequitiesandothervariable-yieldsecuritiesand other shareholdings and investments in companies that are notmateriallysignificantexceptwheresuchsecuritiesorsharesarenotclassifiedasheldfortradingInvestmentsecuritiesalsoincludesharesinunconsolidatedsubsidiariesandinvestmentsinjointventuresandassociatesnotaccountedforusingtheequitymethod

ThisitemmainlyconsistsofinvestmentfundunitsTheseinvestmentscompriseshort-terminvestmentsforthepurposes ofliquiditymanagement(liquidity)initialfundingfornewlylaunchedfunds(funding)investmentsinpensionplansoremployeeretentionprogrammes(employeeinvestments)orlonger-termcapitalinvestments(strategicinvestments)Inadditiontemporaryinvestmentsinfundsusedtoprotecttheliquidityofthesefundsareallocatedtothelsquofundingrsquocategory

TheinitialrecognitionofinvestmentsecuritiesisgenerallybasedonfairvalueThesubsequentmeasurementofthesefinancialassetsdependsontheIFRS9categorytowhichtheyareassignedonacquisitionGainsandlossesontheremeasshyurementofinvestmentsecuritiesarereportedunderothernetremeasurementincomeonfinancialinstruments

55


IftheseportfoliosareequityinstrumentstheymustbemeasuredatfairvaluethroughprofitandlossIntheUMHGroupthefairvalueOCIoptionwasusedforinvestmentsandunconsolidatedsubsidiariesheldasat1January2018Intheeventofacquisitionsofnewequityinstrumentsafter1January2018thedecisiononwhethertousethefairvalueOCIoptionismadeonacase-by-casebasisIfthisitemisadebtinstrumentasisregularlythecase withourowninvestmentsininvestmentfundunitsitmustbemeasuredatfairvaluethroughprofitorlossbecausethecashflowcriterionofIFRS9isnotmetfortheseassets

[13] Shares in companies accounted for using the equity method

Investments in associates and joint ventures are recognised at costintheconsolidatedstatementoffinancialpositionwhensignificantinfluenceisacquiredortheentityisestablishedInsubsequentyearsthecarryingamountoftheequityisadjustedtotakeintoaccountthegrouprsquosshareofthechangesinequityTheequitycarryingamountisreducedbydividendpaymentsreceivedThegrouprsquosshareoftheprofitorlossfromtheassoshyciate or joint venture is recognised in the consolidated income statementasnetincomefromcompaniesaccountedforusingtheequitymethodthegrouprsquosshareofothercomprehensiveincomeisrecognisedinothercomprehensiveincomeGainslossesimpairmentlossesandreversalsofimpairmentlosses on investments in associates and investments in joint ventures accountedforusingtheequitymethodarerecognisedinnetincomefrominvestmentsecurities

[14] Property plant and equipment

Propertyplantandequipmentcomprisethefollowingassetsusedbythegroupforitsownpurposeslandandbuildingsthatareexpectedtobeusedovermorethanoneperiodandoperatingandofficeequipment

PropertyplantandequipmentaremeasuredatcostlessdepreciashytionwhichisreducedbycumulativedepreciationandcumulativeimpairmentlossesinsubsequentfinancialyearsDepreciationiscalculatedonastraight-linebasisovertheusefullifeLandisnotdepreciated

Thenormalusefullivesofpropertyplantandequipmentaredeterminedbytakingintoaccountexpectedphysicalwearandteartechnicalobsolescenceandlegalandcontractualrestrictions

IfthereareindicationsduetofactsorcircumstancesthattheassetsmaybeimpairedtherecoverableamountisdeterminedAnimpairmentlossisrecognisediftherecoverableamountislessthanthecarryingamountatwhichtheassetisrecognisedTherecoverableamountisthehigherofthefairvaluelesscoststosellandvalueinuse

The depreciation expense on property is recognised as an administrativeexpenseImpairmentlossesandgainsarerecognisedinotheroperatingincome(note[33])

[15] Intangible assets

Inadditiontopurchasedandinternallygeneratedsoftwareintangibleassetsalsoincludedistributionandexclusiverightscustomersandgoodwill

IntangibleassetsarerecognisedatcostForthepurposeofsubsequentmeasurementsoftwarepurchasedcustomerrelationshyshipsandotherintangibleassetswithafiniteusefullifearereducedbycumulativedepreciationandcumulativeimpairmentlosses

Ifthereareindications(triggeringevents)attheendofthereportingperiodthatanintangibleassetwithafiniteusefullifemaybeimpairedtheassetistestedforimpairmentIntangibleassetswithindefiniteusefullivesintangibleassetsnotyetreadyforuseandgoodwillarenotamortisedbutareinsteadtestedforimpairmentonceayearTheUnionInvestmentGroupdoesnotdevelopanyofitsownsoftwareaspartofitssoftwareprojectsIntheeventofindicationsofimpairmenttheseassetsarealsosubjectedtoanadhocimpairmenttest

Theamortisationexpenseonintangibleassetsisincludedinadministrativeexpenses(note[32])Impairmentlossesreversals ofimpairmentlossesandgainsandlossesondisposalsofintangishybleassetsarerecognisedunderotheroperatingresult(note[33])

[16] Right of use assets

RightofuseassetsunderrentalandleaseagreementsthathavebeencapitalisedunderIFRS16arerecognisedunderthisitem

AttheUMHGrouprightofuseassetsareinitiallymeasuredattheamountoftheleaseliabilities(note[22])adjustedtotakeaccountofanyprepaidoraccruedleasepaymentsfortheleaseinquestionDuringsubsequentmeasurementtherightofuse

asset is measured at amortised cost less accumulated depreciashytion and impairment losses and taking into account any remeasurementsoftheleaseliabilities

TheyaredepreciatedinaccordancewithIAS16overtheexpectedtermoftheleaseDepreciationisrecognisedinadministrativeexpenses(note[32])

Thecompanyelectednottocapitalisetheserightofuseassetsforshort-termleaseswithatermoflessthanoneyearandforleasesoflow-valueassets

IfthereareindicationsduetofactsorcircumstancesthattheassetsmaybeimpairedtherecoverableamountisdeterminedAnimpairmentlossisrecognisediftherecoverableamountislessthanthecarryingamountatwhichtheassetisrecognisedTherecoverableamountisthehigherofthefairvaluelesscoststosellandvalueinuseImpairmentlossesandgainsarerecognisedinotheroperatingincome(note[33])TheprovisionssetoutinIAS36ImpairmentofAssetsaretobeusedtocalculateimpairment

[17] Assets and liabilities held for sale

Thecarryingamountofnon-currentassetsordisposalgroups forwhichasaleisplannedisrecoveredprincipallythrougha saletransactionratherthanthroughtheircontinuinguseTheseassetsanddisposalgroupsthereforeneedtobeclassifiedasheldforsaleifthecriteriasetoutbelowaresatisfied

TobeclassifiedasheldforsaletheassetsordisposalgroupsmustbeavailableforimmediatesaleintheirpresentconditionsubjectonlytotermsthatareusualandcustomaryforsalesofsuchassetsordisposalgroupsanditmustbehighlyprobablethatasalewilltakeplaceAsaleisdeemedtobehighlyprobableifthereis a commitment to a plan to sell the asset or disposal group an activeprogrammetolocateabuyerandcompletetheplan hasbeeninitiatedtheassetordisposalgroupisbeingactivelymarketedforsaleatapricethatisreasonableinrelationtothecurrentfairvalueandasaleisexpectedtobecompletedwithinoneyearofthedateonwhichtheassetordisposalgroupisclassifiedasheldforsale

AssetsclassifiedasheldforsalearemeasuredatthelowerofcarryingamountandfairvaluelesscoststosellTheassetsarenolongerdepreciatedoramortisedfromthedateonwhichtheyareclassifiedasheldforsale

56


Assetsanddisposalgroupsclassifiedasheldforsaleareshownseparatelyinthestatementoffinancialpositionundernon-curshyrentassetsanddisposalgroupsclassifiedasheldforsaleandliabilitiesincludedindisposalgroupsclassifiedasheldforsaleGainsandlossesarisingonremeasurementatthelowerofcarryingamountandfairvaluelesscoststosellandgainsandlossesonthesaleoftheseassetsordisposalgroupsthatrepreshysentacomponentofanentityarerecognisedintheconsolidatedincomestatementundernetincomefromdiscontinuedoperashytionsGainsandlossesarisingonremeasurementandonthesaleofassetsordisposalgroupsthatdonotrepresentacomponentofanentityarerecognisedintheconsolidatedincomestatementunderotheroperatingresult(note[33])

OccasionallytheUMHGrouphasholdingsoffundingprovidedforanumberofinvestmentfundsasaresultofwhichthegroupisinapositiontoexercisecontroloverthefundconshycernedTheseholdingsareconsolidatedunlesstheysatisfythecriteriatobeclassifiedasldquoheldforsalerdquoasadisposalgroupandarereportedaccordingtoIFRS5Thisisthecase iftheUMHGroupactivelyendeavourstosellofftheholdingsimmediatelyinordertoensurethatthefundingisrepaidandifitishighlyprobablethattheinvestmentfundsconcernedwillnolongerbeunderthecontroloftheUMHGroupwithinoneyearoftheinitialacquisitionoftheholdingsTheyaremeasuredatfairvalueinlinewithIFRS9inaccordancewithIFRS55(c)

[18] Liabilities to banks and customers

LiabilitiestobanksandcustomersincludeallregisteredliabilitieswhicharenotclassifiedasldquoheldfortradingrdquoLiabilitiestobanksandcustomersaregenerallyrecognisedatcostusingtheeffectiveinterestmethodThefairvalueoptionwasnotusedbytheUMHGroupforfinancialliabilities

Interestexpensesforliabilitiestobanksandcustomersarerecognisedseparatelyinnetinterestincome

[19] Asset and liability derivatives

DerivativefinancialinstrumentswithpositiveandnegativefairvaluesareassignedtothestatementoffinancialpositionitemslsquoAssetderivativesrsquoandlsquoLiabilityderivativesrsquoifdespitetheeconomicintentiontohedgetherequirementsforhedgeaccountinghavenotbeenmetGainsandlossesontheremeasshy

urementoftheseitemsarereportedunderothernetremeasureshymentincomeonfinancialinstruments

FiguresreportedintheitemldquoLiabilityderivativesrdquorepresentfundinggapsincapitalpreservationcommitmentsinaccordancewithSection1(1)no3ofGermanPersonalPensionPlanCertificashytionAct(AltZertG)inconnectionwiththeUniProfiRenteproductissuedbyUnionInvestmentPrivatfondsGmbHtotheextentthatsuchfundinggapsariseonthemeasurementofeachindividualcontractasspecifiedinSectionIIno1inconjunctionwithSectionVofcircular22007(BA)issuedbyGermanyrsquosFederalFinancialSupervisoryAuthority(BaFin)on18January2007TheamountsrecognisedasliabilitiesineachcaserepresentthedifferencebetweenthepresentvalueofthepensionplancontributionsguaranteedinaccordancewithSection1(1)no3AltZertGandthemarketvalueofthecustomerportfolioprovidedthatthisdifferenceispositive

InadditionthelsquoLiabilityderivativesrsquostatementoffinancialpositionitemincludesfundinggaprisksarisingfromguaranteefundsthatwereissuedbyassetmanagementcompaniesbelongingtothegroupThecarryingamountisrecognisedasthedifferencebetweenthepresentvalueoftheguaranteecommitmentsatthenextguaranteedateofafundandthenetassetvalueofthefundprovidedthatthisdifferenceispositive

UnderthelsquoAssetderivativesrsquostatementoffinancialpositionitem a call option was capitalised in the previous year that entitledUMHAGtoacquireadditionalsharesinZBIPartnershyschafts-HoldingGmbHInadditionUMHAGrecognisedputoptions in the previous year as the writer that entitled the optionholdertoofferUMHAGsharesinZBIPartnerschafts-HoldshyingGmbHThesewerereportedunderthelsquoLiabilityderivativesrsquoiteminthepreviousyearPleaseseetheinformationinnote[71]

Whendeterminingthecarryingamountsofmarketvaluesfromderivativefinancialinstrumentsvaluationhaircutsforcountershypartycreditrisk(CVA)orowncreditrisk(DVA)aretakenintoaccountifnecessary

[20] Provisions for employee benefits

ProvisionsforemployeebenefitsarerecognisedinaccordancewithIAS19

AdistinctionismadeinoccupationalpensionschemesbetweendefinedcontributionplansanddefinedbenefitplansIndefinedcontributionplanstheentityconcernedhasnoobligationotherthantopaycontributionstoanexternalpensionproviderTheproviderscoveringthepensionentitlementsofemployeesintheUnionInvestmentGrouprsquosGermancompaniesareasfollowsBVVVersicherungsvereindesBankgewerbesaGBerlin(BVVaG)BVVVersorgungskassedesBankgewerbeseVBerlin(BVVeV)R+VPensionsversicherungaGWiesbaden(RVPaG)R+VPensionsshyfondsAktiengesellschaftWiesbaden(RVP)andVersorgungshyskassegenossenschaftlichorientierterUnternehmenVGUeVWiesbaden(VGUeV)Alltheseplansaredefinedbenefitplansbuttheyaretreatedasdefinedcontributionplansinaccordancewiththerulesformulti-employerplansspecifiedinIAS1934

Underdefinedbenefitplanstheentityconcernedhasanobligationtopaythebenefitspromisedtocurrentandformeremployeesalthoughthereisadistinctionbetweenplansfundedbyprovisionsandthosefundedbythird-partyarrangements

In accordance with IAS 19 the Union Investment Group recognisshyesprovisionsforobligationsarisinginconnectionwithpensionentitlementsandcurrentbenefitspayabletoeligiblecurrentandformeremployeesofthegroupandtheirsurvivingdependants(theplansbeingfundedbybothemployerandemployees)Therearevariousdifferentpensionsystemsinoperation at the individual Union Investment Group sites dependingonlocallegalfinancialandtaxcircumstancesHoweverallthesystemsaregenerallybasedonthelengthofserviceandtheindividualemployeersquoslevelofremuneration

Since1November2007theremainingpensionobligationsunderemployer-fundedpensioncommitmentstoretireesandformeremployeebeneficiarieswithvestedpensionentitleshymentsandtoasignificantproportionofthebeneficiarieswhoarestillemployedhavebeenfundedviaVGUeVorRVPAstheseremainingobligationsarefundedviaexternalpensionproviders the UMH Group does not have any direct payment obligationsinrespectofthesepeople

ThedefinedbenefitobligationofUMHGroupcompaniesismeasured in accordance with IAS 19 using the projected unit creditmethodandisbasedonactuarialreportsThecalculationoftheobligationtakesintoaccountcurrentprojectionsofmortality invalidity and employee turnover expected increases in salaries entitlements and pensions and uses a realistic discount

57


rateThediscountrateisbasedoninterestratescurrentlyavailableforlong-termcorporatebondsfrominvestment-gradeissuersand wassetat075(previousyear100)MortalityandinvalidityassumptionsarederivedfromtheHeubeck2018Gmortalitytables

Theemployer-fundedpensionobligationsarecoveredbyVGUeVandRVPassetswhichmaybeusedsolelyforthepurposesofmeetingthepensioncommitmentsandareprotectedfromtheclaimsofanycreditorsTheVGUeVandRVPassetsareplanassetsasdefinedbyIAS19andarenettedagainstthepensionobligashytionsIftheassetsexceedthepensionobligationsanassetitem isreportedinaccordancewithIAS19Iftheassetsdonotcover theobligationthenetobligationisrecognisedunderprovisionsforpensions

In some cases in the past pension insurance policies were taken outtocovertherisksarisingfrompensionobligationsSomeofthesepoliciesarepledgedtoemployeesThepremiumsarepaidbytheUnionInvestmentGroup

Theobligationsarisingfromthedeferredcompensationscheme(employee-funded)arecoveredbyinvestmentsinUnionInvestshymentGroupinvestmentfundunitsSinceSeptember2013theseinvestmentfundunitshavebeenheldinacontractualtrustarrangement(CTA)byR+VTreuhandGmbHWiesbadenTheyareplanassetsasdefinedbyIAS19andarenettedagainstthecorrespondingpensionobligations

ActuarialgainsorlossescanarisefromincreasesordecreasesinthepresentvalueofthedefinedbenefitobligationthefairvalueofplanassetsorreimbursementrightsThereasonsfortheseactuarial gains or losses can include changes in the calculation parameterschangesintheestimatesofriskfrompensionobligationsdifferencesbetweentheactualandexpectedreturnonplanassetsanddifferencesbetweentheactualandexpectedreturnonreimbursementrights

ActuarialgainsandlossesondefinedbenefitobligationsplanassetsandreimbursementrightsarerecognisedinothercomprehensiveincomeinaccordancewithIAS19120(c)ProvisionsarerecognisedtocoverobligationsarisingfrompartialretirementschemesSince2015theinvestmentfundunitstosecurepartialretirementclaimshavebeenheldinacontractualtrustarrangement(CTA)byR+VTreuhandGmbHWiesbadenTheprovisionsforpartialretirementarrangementsarenettedagainstthefairvalueoftheinvestmentunits

[21] Other provisions

OtherprovisionsarerecognisedinaccordancewithIAS37

ProvisionsareliabilitiesofuncertaintimingoramountTheyarerecognisedforpresentobligationsarisingfrompasteventsifanoutflowofresourcesembodyingeconomicbenefitsislikelyandareliableestimateoftheobligationcanbemade

Theprovisionsarerecognisedandmeasuredintheamountofbestestimateofthepresentvalueoftheexpectedutilisationaccountingfortherisksanduncertaintiesassociatedwiththerespectiveissueaswellasfutureevents

ProvisionsforfinancialguaranteesthatfallwithinthescopeofIFRS9aremeasuredatfairvalueoninitialrecognitionTheyaresubsequentlymeasuredatthehigherofanyprovisionrecognisedinaccordancewithIAS37andtheamountinitiallyrecognised

[22] Lease liabilities

LiabilitiesunderleasesandrentalagreementsinaccordancewithIFRS16aretobedisclosedunderthisitemTheyaremeasuredatthepresentvalueoftheremainingleasepaymentsdiscountedusingtheinterestrateimplicitintherentalagreementorifthisinterestratecannotbereadilydeterminedusingthelesseersquoscompany-specificincrementalborrowingrateTakingintoaccounttheleasetermtheincrementalborrowingratesarecalculatedonthebasisofobservableswapcurves(basecurve)withthesamecurrencysupplementedbyacreditspread

ContractuallygrantedrenewaloptionsextendingbeyondthebasicleasetermaretakenintoaccountatthetimeofinitialacquisitionprovideditisprobableatthetimeofacquisitionthattherenewaloptionwillbeexercisedInthecaseofrenewaloptionswheretherentafterrenewalisequaltoorhigherthantherentduringthebasicleasetermitisnotconsideredsufficientlycertainthattherenewaloptionwillbeexercisedThisassump-tioncanberefutedinanindividualcaseiftheeconomicconse-quencesforthelesseeofnotexercisingtherenewaloptiontakingintoaccountfactorsspecifictothecontracttheassetandthecompanyandmarket-basedfactorswouldbesignifishycantTheprobabilityofrenewaloptionsforindividualcontractsbeingexercisedisregularlyassessedwiththedepartmentsresponsibleatthetimeofinitialacquisitionandforsubsequentmeasurementpurposes

Interestexpensesonleaseliabilitiesarereportedinnetinterestincome(note[26])

[23] Income

Interest and dividends

Interestisrecognisedusingtheeffectiveinterestmethodandrecognisedonanaccrualbasis

Thecashflowsusedtocalculatetheeffectiveinterestrateusedtakeaccountofcontractualarrangementsinconnectionwiththerespectivefinancialassetsandfinancialliabilities

Dividendincomefromunconsolidatedsubsidiariesequityinvestmentsanddistributionsfrominvestmentfundunitsarerecognised at the date that the legal entitlement to the paymentarises

Revenuefromcontractswithcustomers

In the UMH Group contracts are concluded that may include theprovisionofmultipleservicesTheresultingrevenueispostedseparatelyifaserviceistobeclassifiedasaseparatelydefinableperformanceobligation

RevenuefromcontractswithcustomersisrecognisedwhentheunderlyingserviceshavebeenperformeditisprobablethattheeconomicbenefitswillflowtothegroupandtheamountoftheincomecanbereliablydeterminedThusincomeiseitherrecognised over the period in which the underlying services areperformedorrecogniseddirectlyinprofitorlossaftertheservicehasbeenperformed

IntheUMHGrouprevenuefromcontractswithcustomersisprimarilycommissionincome

Commissionsearnedovertheperiodoftheperformanceobligashytionsincludeinparticularfeesforthemanagementofinvestmentfundsorforassetmanagementinotherformatsaswellasfortheholdingofsecurities(ldquouniondepotsrdquo)

TheUMHGroupreceivesperformance-basedmanagementfeesfromsomecontractsThesearecontingentuponexceedingagreedabsoluteorrelativeoutperformancecriteriathatvaryfromproducttoproductandmayincludemonthlyquarterlyannualorlonger

58


measurementperiodsInthecaseofperformance-basedmanagementfeesrevenueisreceivedwhentheamountof thatprovisioncanbereliablyestimatedanditishighlylikelythattherewillbenosignificantreversalintherecognisedrevenueassoonasuncertaintyceasestoexistDuetotherisksofadownturnonthecapitalmarketswhichcannotbeexcludshyedthesecommissionsarethereforeregularlycollectediftheagreedoutperformancecriteriahavebeenmetinrelationtothedefinedbenchmarkandthemeasurementperiodasthere isnosignificantriskofcancellationupuntilthisdate

For some contracts with customers the asset management companiesoftheUMHGrouphavetheoptionofinvolvingthirdpartiesintheprovisionofservicestocustomersInthesecaseswithfewexceptionstheUMHGroupisgenerallyregardedastheoriginator(ldquoprincipalrdquo)oftheseagreementsbecauseithasthepowertodisposeoftheservicespromisedtothecustomers

The practical expedient waiver to adjust consideration to impact fromafinancingcomponent(IFRS1563)recognitionofcostsofobtainingacontractasanexpense(IFRS1594)andwaiverofperformanceobligations(IFRS15121)areapplied

[24] Income taxes

Currentanddeferredtaxassetsarereportedunderincometaxassetscurrentanddeferredtaxliabilitiesarereportedunderincometaxliabilities

CurrentincometaxassetsandliabilitiesarecalculatedusingcurrenttaxratesAcorporationtaxrateof150(previousyear150)andasolidaritysurchargeof55(previousyear55)ofcorporationtaxisusedfortheGermancompaniesThetradetaxratefortheGermancompanieswas154(previousyear154)DeferredtaxassetsandliabilitiesaroseinconnecshytionwithdifferencesbetweenthecarryingamountsofassetsandliabilitiesinaccordancewithIFRSandthoseinthetaxbaseThesedifferencesareexpectedtoaffectincometaxliabilitiesorrefundsinthefuture(temporarydifferences)DeferredtaxesweremeasuredusingthetaxratesexpectedtoapplyinthecountryofthecompanyconcernedintheperiodinwhichthetaxeswillactuallybepaidorrecoveredDeferredtaxassetsforasyetunusedtaxlosscarry-forwardsareonlyrecognisedifitisprobablethattherewillbesufficientfuturetaxableprofitsinthesametaxentityagainstwhichthelosses

canbeutilisedCurrenttaxreceivablesandpayablesarereported separately and are not netted nor are they disshycounted

Deferredtaxassetsandliabilitiesarerecognisedeitherinprofitorloss(underincometaxes)orinequitydependingonthetreatmentoftheitemstowhichtheyrelateDeferredtaxassetsanddeferredtaxliabilitiesarenettedinthestatementoffinancialpositioniftheyrelatetothesametaxauthorities

Other nonshyincomeshyrelated taxes are reported under other operatingresult(note[33])

TherewerenochangestotaxratesortaxlegislationaftertheendofthereportingperiodthatcouldhaveasignificantimpactontheUMHGrouprsquosincometaxassetsorliabilities

TheincometaxexpenserepresentsthetotalofthecurrenttaxexpenseandthedeferredtaxesThecurrenttaxexpenseiscalculatedonthebasisofthetaxableincomefortheyearTaxableincomeisdifferentfromthenetincomefortheyearreportedintheincomestatementbecausetaxableincomedisregardsincomeandexpensethatisnottaxablededuc-tiblefortaxpurposesorthatisonlytaxabledeductiblefortaxpurposesinsubsequentyearsTheUMHGrouprsquoscurrenttaxliabilitieswerecalculatedusingthetaxratesinforceattheendofthereportingperiodorenactedpriortotheendofthereportingperiod

TheUMHGroupisrequiredtopayincometaxesinvariouscountriesandthebasisformeasuringthisliabilityvariesfromcountrytocountryProvisionsfortaxesworldwidewererecognisedonthebasisofprofitsdeterminedinaccordancewithlocalstipulationsandlocallyapplicabletaxratesHowevertherearesometransactionswhosefinaltaxationcannotbedefinitivelydeterminedduringthenormalcourseofbusinessTheamountoftheprovisionssetasideforthesemattersisbasedonestimatesastotheprobabilityofadditionaltaxbecomingdueinthefuture andtheamountofsuchliabilitiesAnappropriateprovisionisrecognisedforanyrisksarisingfromdifferenttaxtreatmentIfthefinaltaxationofthesetransactionsdiffersfromthetaxoriginallyassumedthiswillaffectthecurrentanddeferredtaxesrecognisedintheperiodinwhichthetaxationisdefinitivelydetermined

The UMH Group also needs to make estimates to determine whetheranyimpairmentlossesneedtoberecognisedon

deferredtaxassetsTherearetwokeyelementsindecidingwhetherdeferredtaxassetsareimpairedanassessmentof theprobabilitythattemporarymeasurementdifferenceswillreverseandanassessmentastowhetherthelosscarry-forshywardsthathavegivenrisetotherecognitionofdeferredtaxassetscanbeutilisedThesefactorsdependontheavailabilityoffuturetaxableprofitsduringtheperiodsinwhichthetemporarymeasurementdifferencesreverseandthetaxlosscarry-forwardscanbeutilisedTheinterpretationofcomplextaxlegislationandtheamountandtimingoffuturetaxableincomearesubjecttoadegreeofuncertaintyTheremaybechangestothetaxespayableinfutureperiodsasaconsequenceofdifferencesbetweenactualoutcomesandassumptionsorfuturechangesintheseassumptionsespeciallyinviewoftheincreasinginterdependenceofinternationalmarkets

[25] Contingent liabilities

ContingentliabilitiesarepossibleobligationsarisingfrompasteventsTheexistenceoftheseobligationswillonlybeconfirmedbyfutureeventsoutsidethecontroloftheUMHGroupPresentobligationsthatarisefrompasteventsbutwhicharenotrecognisedbecauseoftheimprobabilityofanoutflowofresourcesembodyingeconomicbenefitsorforwhichasufficientlyreliableestimateoftheamountcannot bemadealsoconstitutecontingentliabilities

Theamountofcontingentliabilitiesisdisclosedinthenotesunlessthepossibilityofanoutflowofresourcesembodyingeconomicbenefitsisextremelylow

Contingentliabilitiesaremeasuredatthebestestimateofpossiblefutureutilisation

ContingentliabilitiesforlitigationrisksarerecognisedwhentheconditionsforrecognisingaprovisionhavenotbeenmetbutthepossibilitythatthelitigationwillresultinaliabilityforaUMHGroupentityisnotunlikelyRisksfromlegaldisputesaremeasuredaccordingtotheprobabilityofthemoccurring

59


[26] Net interest income

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Interest income and current 7047 8583 -1536

fromlendingandmoneymarketoperations 22 116 shy94

fromnegativeinterestonfinancialassets -1704 shy1335 -369

frominvestmentfundunits 7297 8180 shy883

fromotherreceivables 26 14 12

fromequityinvestments 6 8 shy2

frominvestmentsinsubsidiaries 1400 1600 shy200

Income from profit and loss transfer agreements

168 ndash 168


forliabilitiestobanksandcustomers shy81 -1077 996

forleaseliabilities -887 shy994 107

forotherliabilities shy20 -257 237

Total 6227 6255 -28

InterestincomecollectedusingtheeffectiveinterestmethodamountstoEUR22thousand(previousyearEUR116thousand)


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Allowances for losses on loans and advances to banks

ndash ndash ndash

Addition ndash ndash ndash

Reversal ndash ndash ndash

Netincomefrommodification ndash ndash ndash

Directly recognised impairment losses ndash ndash ndash

Receiptsfromdirectlyrecognisedloansandreceivables

ndash ndash ndash

Allowances for losses on loans and advances to customers

-17 -54 37




Directly recognised impairment losses shy18 shy55 37


1 1 ndash

Allowances for other receivables ndash ndash ndash






ndash ndash ndash

Total -17 -54 37

ContractswithcustomerswithinthemeaningofIFRS15accountforanimpairmentlossofEUR-18thousand(previousyearEUR-55thousand)

Consolidated income statement disclosures

60


[28] Net fee and commission income

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Other 119407 113493 5914


forvolume-basedcommission -760676 -729382 shy31294

forrevenue-basedcommission -343564 -351680 8116

forsecuritiescustodyaccounts shy4592 -4715 123

Other shy105323 -75311 shy30012

Total 1565889 1467998 97891

Commissionincomeisattributabletorevenuefromcontractswithcustomersincludingfunds

Thevolume-basedsalescommissiongeneratedfromthesaleoffundunitswithafront-endfeewhich is dependent on the transaction volume is used among other things to cover sales and marketingexpensesTheamountoffront-endfeesiscalculatedineachcaseaccordingtoapercentagesurchargeonthenetassetvalueofthefundunitissuedunderinvestmentcondishytionsFront-endfeesarerecognisedatthedateofthesale

Themanagementfeesrepresentthepaymentofconsiderationforthemanagementofmutualfundsspecialfundsindividualportfoliosandportfoliosformingpartofadvisoryagreementswith

institutionalclientsManagementfeesvarydependingontheassetclassesbeingmanagedandsometimesincludeperformance-basedcomponentsInthecaseofperformance-basedmanageshymentfeesrevenueisreceivediftheagreedoutperformancecriteriahavebeenmetinrelationtoadefinedbenchmarkandtheagreedmeasurementperiodasthereisnosignificantriskofcancellationupuntilthisdateFlat-ratepaymentsarepartlyleviedtocovercostsdefinedinthecontractTheongoingmanagementfeesandlump-sumpaymentswhicharecontractuallyagreedasapercentageoftheassetsundermanagementarerecognisedoveraperiodoftimeandgenerallysettledonamonthlybasis

ManagementfeesalsoincludeinvestmentcompensationagreedforthemanagementofthepropertyfundsorotheralternativeinvestmentvehiclesThesearecollectedatthetimeofthetransferofbenefitsandencumbrancesorinthecaseofprojectdevelopmentsatthetimethepaymentsaresettledintheinvestmentfundsinaccordancewithconstructionprogress

ThemanagementfeesshowninthetableaboveincludecommissionincomewhichthemanageshymentcompaniesoftheUMHGroupreceivefortheexecutionofsecuritieslendingtransactions fortheaccountofthecustomersAnyincomeisreceivedovertheperiodinwhichtheservicewasperformedThecommissionincomefromsecuritieslendingtransactionsisdistributedbetweenthegrouprsquosmanagementcompaniesandinvestmentfundsortheassetsmanagedforclientsinotherformatsfromwhichthesecuritiesarelent

IncomefromsecuritiescustodyaccountsisprimarilyattributabletorecognisingcustodyaccountfeesoveraperiodfortheuniondepotsheldbyUnionInvestmentServiceBankAGFrankfurtamMainThesecustodyaccountfeesareaccruedmonthlyasreceivablesandareusuallycollectedinDecemberThisalsoincludesfeesforotherservicesprovidedaspartofthecustodyaccountmanagementwhicharecollectedatthetimetheserviceisprovided

Otherfeeandcommissionincomeincludesincomefromthebrokerageofinvestmentfundsofexternalassetmanagementcompanies

61


[29] Net income from investment securities

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Gains and losses from the disposal of shares and other variable-yield securities (including other shareholdings)

-5018 2443 -7461

Gainsandlossesfromthedisposal ofinvestmentfundunits

shy5018 2443 -7461

Gains and losses on the sale or change in fair value of investments in associates

48496 ndash 48496

Realisednetincomefrom investments in associates

48496 ndash 48496

Total 43478 2443 41035

[30] Other net remeasurement income on financial instruments

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Gains and losses on derivatives used for purposes other than trading

-96954 -58311 -38643

Fair value gains and losses on derivatives usedforpurposesotherthantrading

-95487 shy52850 -42637

Realised gains and losses on derivatives used forpurposesotherthantrading

-1467 -5461 3994

Income from financial assets mandatorily measured at fair value through profit or loss

13775 14901 -1126

Incomefromfinancialassetsmandatorilymeasuredatfairvaluethroughprofitorloss

13775 14901 -1126

Netremeasurementincomefrominvestmentunitsmandatorilymeasuredatfairvaluethroughprofitorloss

13775 14901 -1126

Total -83179 -43410 -39769

62


[31] Net income from companies accounted for using the equity method

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Joint ventures 5869 6578 -709

Associates -1266 27293 -28559

Total 4603 33871 -29268

[32] Administrative expenses

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Staff costs -451965 -428002 -23963

Wagesandsalaries -393468 -374560 shy18908

Socialsecuritycontributions -42779 -38728 shy4051

Pensions and other postshyemployment benefitexpenses

-15718 -14714 shy1004


IT expenses -109026 shy105488 shy3538

Consulting -61026 -57883 shy3143

Publicrelationsmarketing shy59050 -75246 16196


Property and occupancy costs shy23081 shy21834 -1247

Miscellaneous -100562 -106424 5862


Propertyplantandequipment -4947 -4807 shy140

Intangibleassets shy42893 -38603 shy4290

Rightofuseassets -28737 shy25294 shy3443

Total -919094 -909448 -9646

[33] Other operating result

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Other operating income 36474 33133 3341

Incomefromthereversalof deferredliabilities

16354 11839 4515

Incomefromtherefundofothertaxes 4240 6637 -2397

Reversalsofimpairmentlosseson intangibleassets

975 ndash 975

Incomefromexchangedifferences on currency translation

671 176 495

Incomefromthereversalofprovisions 197 979 -782

Rental income 218 471 shy253

Otherincomefromleases 0 1 shy1

Incomefromdeconsolidation ndash 847 -847

Miscellaneous other operating income 13819 12183 1636

Other operating expenses -4966 -13608 8642

Expensesforothertaxes shy1080 shy9392 8312

Write-downsonpurchased customer relationships

shy994 -474 shy520

Expensesforexchangedifferences on currency translation

-277 shy331 54

Expensesfromlossabsorption -175 ndash -175

Expensesforrestructuringmeasures shy25 ndash shy25

Otherexpensesfromleases 0 -36 36

Miscellaneous other operating expenses shy2415 -3375 960

Net earnings from non-current assets held for sale and disposal groups that do not represent a component of an entity

ndash 73006 -73006

Netearningsfromdisposalgroupsheldforsalethatdonotrepresentacomponentofan entity

ndash 73006 -73006

Total 31508 92531 -61023

63


[34] Income taxes

Thebreakdownofincometaxesisasfollows

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Current tax expense -210812 -187254 -23558

Deferred taxes 21588 17580 4008

Total -189224 -169674 -19550

Thefollowingreconciliationshowstherelationshipbetweenconsolidatedearningsbeforetaxesandincometaxesinthefinancialyear

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


x income tax rate 31260 31260 ndash

= expected income tax expense in financial year

203007 203248 -241

Deductionfromtaxowing to taxshyexempt income

-22674 -41169 18495

Additional taxes due to non-deductibleexpenses

4371 5936 -1565

Trade tax variance 4713 5423 -710

Taxratedifferencesonincomesubject to taxation in other countries

-6128 -4274 shy1854

Effectsoftaxratechangesandnewtaxes ndash -17 17

Currenttaxexpenseincomerelating to prior periods

-1687 shy914 -773

Deferredtaxexpenseincome relating to prior periods

4937 256 4681

Changeinimpairmentofdeferredtaxassets shy128 shy155 27

Other 2813 1340 1473

Tax expense in accordance with IFRS 189224 169674 19550

Thedeferredtaxincomeattributabletotemporarydifferencesorthereversalthereofthatdidnotresultfromeitherlosscarry-forwardsortaxratedifferencesamountedtoEUR26524thousand(previousyearEUR17836thousand)

Thedeferredtaxexpenseincomeattributabletotaxratechangesortheintroductionofnewtypesoftaxisshownseparatelyinthereconciliation

64


Statement of comprehensive income disclosures

[35] Amounts reclassified to profit or loss

ExchangedifferencesoncurrencytranslationofforeignsubsidiariesheldforsaleintheamountofEUR-3508thousandwerereclassifiedtotheconsolidatedincomestatementinthepreviousyearduetothechangeintheconsolidatedgroupEUR-8thousandwasincurredinlossesfromthecurrencytranslationofforeignsubsidiariesheldforsaleinthepreviousyear

Asinthepreviousyeartherewerenoadditionalreclassificationsfromothercomprehensiveincometotheconsolidatedincomestatementinthefinancialyear

65


[36] Income taxes relating to components of other comprehensive income

Thetablebelowshowstheincometaxesrelatingtothevariouscomponentsof othercomprehensiveincome

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Amounts reclassified to profit or loss (before taxes)

-4608 1655 -6263

Income taxes relating to components of other comprehensive income

ndash 0 0

Amounts reclassified to profit or loss (after taxes)

-4608 1655 -6263

Exchangedifferencesoncurrencytranslationofforeignsubsidiaries(beforetaxes)

ndash shy8 8


ndash 0 0

Exchange differences on currency translati-on of foreign subsidiaries (after taxes)

ndash -8 8

Shareofothercomprehensiveincomeofjointventuresandassociatesaccountedforusingtheequitymethod(beforetaxes)

-4608 1663 -6271


ndash ndash ndash

Share of other comprehensive income of joint ventures and associates accounted for using the equity method (after taxes)

-4608 1663 -6271

Amounts not reclassified to profit or loss (before taxes)

-14909 -10794 -4115


-2661 7281 -9942

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Amounts not reclassified to profit or loss (after taxes)

-17570 -3513 -14057

GainsandlossesfromequityinstrumentsforwhichthefairvalueOCIoptionwasexercised(beforetaxes)

-116 1882 shy1998


-76 shy21 shy55

Gains and losses from equity instruments for which the fair value OCI option was exercised (after taxes)

-192 1861 -2053

Actuarialgainsandlossesondefinedbenefitplans(beforetaxes)

-14793 -12676 -2117


shy2585 7302 -9887

Actuarial gains and losses on defined benefit plans (after taxes)

-17378 -5374 -12004

Other comprehensive income (before taxes) -19517 -9139 -10378


-2661 7281 -9942

Other comprehensive income (after taxes) -22178 -1858 -20320

66


[37] Cash reserve

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Cash in hand 44 17 27

Total 44 17 27

[38] Loans and advances to banks

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Loans and advances to banks in Germany 561031 510566 50465

ofwhichrepayableondemand 558087 509188 48899

Loans and advances to banks outside Germany 30995 30929 66


Total 592026 541495 50531

Themaximumriskforreceivablesisthecarryingamount

[39] Loans and advances to customers

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Loans and advances to customers in Germany 41947 66779 -24832

Loans and advances to customers outside Germany

38264 42663 -4399

Total 80211 109442 -29231

ThecarryingamountisthemaximumcreditriskforallreceivablesTherearenosecuredreceivables(previousyearnone)

Therearenoemployerloanstosalariedstaff(previousyearnone)

InadditiontheyincludereceivablesfromcustomersofEUR5466thousand(previousyear EUR5869thousand)inrespectofdeferredcustodyaccountfeesforinvestmentaccountsunderGermanyrsquosCapitalAccumulationAct(VermBG)

[40] Asset derivatives

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

From other transactions ndash 28136 -28136

Total ndash 28136 -28136


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Equities and other variable-yield securities 1686246 1477112 209134

Equities 31 31 ndash

Investmentfundunits 1678894 1470948 207946

Other shareholdings 7321 6133 1188

Investments in subsidiaries 56804 26361 30443

Total 1743050 1503473 239577

Consolidated statement of financial position disclosures

67


Changes in investment securities

Equities and oth-er variable- yield

securities

Investments in subsidiaries

Total


Carrying amount as at 1 Jan 2019 975205 22847 998052

Cost as at 1 Jan 2019 990683 6650 997333

Additions 840727 2239 842966

Reclassifications shy13992 ndash shy13992

Disposals -337379 ndash -337379

Currency translation 0 ndash 0

Cost as at 31 Dec 2019 1480039 8889 1488928

Cumulative changes resulting from measurement at fair value as at 1 Jan 2019

-15478 16197 719

Changes recognised in other comprehensive incomeresultingfrommeasurementatfairvalue in reporting period

607 1275 1882

Changesresultingfrommeasurementatfairvaluethroughprofitorlossinreportingperiod

12431 ndash 12431

Reclassifications(measurementatfairvalue) shy4023 ndash shy4023

Disposals(measurementatfairvalue) 3536 ndash 3536

Changesresultingfromcurrencytranslation(measurementatfairvalue)

0 ndash 0

Cumulative changes resulting from measurement at fair value as at 31 Dec 2019

-2927 17472 14545

Carrying amount as at 31 Dec 2019 1477112 26361 1503473


securities


Total


Cost as at 1 Jan 2020 1480039 8889 1488928

Additions 812030 50 812080

Reclassifications 1 ndash 1

Disposals -614498 shy50 -614548

Changeintheconsolidatedgroupndashadditions 1 31746 31747

Cost as at 31 Dec 2020 1677573 40635 1718208


-2927 17472 14545


1187 shy1303 -116


15510 ndash 15510

Reclassifications(measurementatfairvalue) -1479 ndash -1479

Disposals(measurementatfairvalue) -3618 0 -3618


8673 16169 24842


68



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Investments in joint ventures 54008 59060 -5052

Investments in associates 7735 71127 -63392

Total 61743 130187 -68444

TherearenoactivemarketsfortheinvestmentsaccountedforusingtheequitymethodnorcantheirfairvaluebereliablydeterminedbyusingameasurementmethodbasedonassumptionsthatdonotrelyonavailableobservablemarketdataTherearenoothersuitablemarketselsewhereTheinvestmentsinjointventuresandassociatesareintendedtosupporttheoperatingactivitiesoftheUMHGroupoverthelongterm

Changesinsharesincompaniesaccountedforusingtheequitymethod

Investments in joint ventures

Investments in associates

Total



Changesresultingfrommeasurementundertheequitymethod

2348 17166 19514

ofwhichchangesrecognisedinothercomprehensive income

shy4230 -10127 -14357

ofwhichchangesrecognisedinprofitorloss 6578 27293 33871

Change in the consolidated group ndash -629 -629



shy5052 -13717 -18769


shy10921 shy12451 -23372

ofwhichchangesrecognisedinprofitorloss 5869 -1266 4603



ThechangesrecognisedinequityrelatingtoinvestmentsinjointventuresaccountedforusingtheequitymethodincludeEUR-4608thousand(previousyearEUR1663thousand)attributabletocurrencytranslationandEUR-6313thousand(previousyearEUR-5893thousand)attributabletodistributions

ThechangesrecognisedinequityrelatingtoinvestmentsinassociatesaccountedforusingtheequitymethodcomprisedEUR-12451thousand(previousyearEUR-10127thousand)attributabletodistributions

69



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Land and buildings 24621 16346 8275

Operating and office equipment 12087 9094 2993

Total 36708 25440 11268

Changesinpropertyplantandequipment

Land and buildings

Operating and office

equipment

Total



Cost as at 1 Jan 2019 25650 22983 48633

Additions 3271 4693 7964

Reclassifications ndash 0 0

Disposals ndash -2738 -2738

Cost as at 31 Dec 2019 28921 24938 53859

Amortisation and impairment losses as at 1 Jan 2019

-11319 -15027 -26346

Additionsndashamortisation -1256 shy3550 -4806


Disposalsndashdepreciation ndash 2733 2733

Amortisation and impairment losses as at 31 Dec 2019

-12575 -15844 -28419


Land and buildings


equipment

Total


Cost as at 1 Jan 2020 28921 24938 53859

Additions 9310 4514 13824

Disposals -5975 -7425 shy13400


Cost as at 31 Dec 2020 32325 26780 59105


-12575 -15844 -28419

Additionsndashamortisation shy914 shy4032 -4946

Disposalsndashdepreciation 5360 7352 12712

Disposalsminusimpairmentlosses 436 ndash 436

Changeintheconsolidatedgroupndashadditions shy11 -2169 shy2180


-7704 -14693 -22397


Thenormalusefullifeforoperatingandofficeequipmentisbetweenthreeand13years

TheldquoLandandbuildingsrdquoitemincludesleaseholdimprovementsthenormalusefullifeofwhichisbasedontherespectiveleaseterm

70



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Goodwill 98778 ndash 98778

Purchased software 112333 117248 -4915

Internally generated software 1954 ndash 1954

Purchased customer relationships 65165 3793 61372

Miscellaneous intangible assets 28724 28259 465

Total 306954 149300 157654

Withtheexceptionofgoodwill(note[71])andabrandincludedinmiscellaneousintangibleassetsatEUR2059thousand(previousyearnone)allintangibleassetshavefiniteusefullives

71


Changesinintangibleassets

Goodwill Purchased software

Internally generated

software

Purchased customer

relationships

Miscellaneous intangible

assets

Total

EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand

Carrying amount as at 1 Jan 2019 ndash 106769 ndash 4267 30827 141863

Cost as at 1 Jan 2019 ndash 330087 ndash 5690 42909 378686

Additions ndash 46517 ndash ndash ndash 46517

Reclassifications ndash 0 ndash ndash ndash 0

Disposals ndash -6741 ndash ndash ndash -6741

Cost as at 31 Dec 2019 ndash 369863 ndash 5690 42909 418462

Amortisation and impairment losses as at 1 Jan 2019 ndash -223318 ndash -1423 -12082 -236823

Additions(amortisation) ndash -36035 ndash -474 -2568 -39077


Disposalsndashdepreciation ndash 2053 ndash ndash ndash 2053

Disposalsndashimpairmentlosses ndash 4685 ndash ndash ndash 4685

Amortisation and impairment losses as at 31 Dec 2019 ndash -252615 ndash -1897 -14650 -269162

Carrying amount as at 31 Dec 2019 ndash 117248 ndash 3793 28259 149300


Additions ndash 34394 1987 ndash ndash 36381


Changeintheconsolidatedgroupndashadditions 98778 1846 ndash 62366 2272 165262

Cost as at 31 Dec 2020 98778 406076 1987 68056 45181 620078

Reversals of impairment losses as at 1 Jan 2020 ndash ndash ndash ndash ndash ndash

Additions ndash ndash ndash ndash 975 975

Reversals of impairment losses as at 31 Dec 2020 ndash ndash ndash ndash 975 975


Additions(amortisation) ndash shy40125 shy33 shy994 -2735 -43887


Changeintheconsolidatedgroupndashadditions ndash -1017 ndash ndash -47 -1067

Amortisation and impairment losses as at 31 Dec 2020 ndash -293743 -33 -2891 -17432 -314099

Carrying amount as at 31 Dec 2020 98778 112333 1954 65165 28724 306954

Thenormalusefullifeformostpurchasedsoftwareisfourorfiveyearsforpurchasedcustomerrelationshipstwelveyearsor20yearsandformiscellaneousintangibleassets15yearsInternallygeneratedsoftwarehasausefullifeoffiveyearsAmortisationisrecognisedonastraight-linebasis

72


[45] Income tax assets

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Current income tax assets 25518 7904 17614

Germany 20070 2242 17828

Restofworld 5448 5662 shy214

Deferred income tax assets 81816 82546 -730

Deferredtaxassets (recognisedinprofitorloss)

207959 117651 90308

Deferredtaxassets (recognisedinequity)

51019 43333 7686

Netting -177162 -78438 -98724

Total 107334 90450 16884

DeferredtaxassetsthatwereonlyexpectedtoberealisedaftertwelvemonthsamountedtoEUR77677thousand(basedontheirnetvaluepreviousyearEUR76212thousand)

DeferredtaxassetsrepresentthepotentialincometaxrelieffromtemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesintheIFRSconsolidatedstatementoffinancialpositionandthetaxaccountsinaccordancewithlocaltaxregulationsforthecompaniesintheUMHGroup

Nodeferredtaxeswererecognisedinrespectoflosscarry-forwardsofEUR969thousand(previousyearEUR512thousand)asitisnotcurrentlyconsideredcertainthattheycanbeutilised

Deferredtaxassetswererecognisedinconnectionwiththefollowingstatementoffinancialpositionitems

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets

Investmentfundunits 2315 4131 -1816

Investmentsinsubsidiariesand equityinvestments

0 96 -96

Propertyplantandequipment 119 119 ndash

Intangibleassets 10 10 ndash

Other assets 1496 1483 13

Equity and liabilities

Liabilityderivatives 53659 25410 28249

Provisionsforemployeebenefits 94833 82853 11980

Other provisions 633 639 -6

Otherliabilities 9553 13368 shy3815

Leaseliabilities 96360 32875 63485

Total 258978 160984 97994

73


[46] Other assets

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Other financial receivables 180667 170528 10139

Tradereceivables 179174 169296 9878

ofwhichfrominvestmentfunds 176967 166508 10459

Miscellaneousotherreceivables 1493 1232 261

Other tax assets 14649 22865 -8216

Miscellaneous other assets 13303 13880 -577

ofwhichfundingsurplusfor definedbenefitplans

108 ndash 108

ofwhichreimbursementrightsrecognisedasassetsinaccordancewithIAS19116

12280 11011 1269

Prepaid expenses 8800 9790 -990

Total 217419 217063 356

Themaximumriskforotherfinancialreceivablesisthecarryingamount


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Right of use assets for land and buildings 295030 97025 198005

Right of use assets for operating and office equipment

5329 5938 -609

Total 300359 102963 197396

RightofuseassetsforlandandbuildingsincreasedparticularlyasaresultoftakingoccupancyoftheofficespaceintheWINXbuildinginFrankfurtamMainandtherenewaloftherentalagreementsfortheofficespaceinEmporioinHamburg

Changesinrightofuseassets

Land and buildings


equipment

Total



Additions 2939 1888 4827

Remeasurement 5607 shy225 5382

Depreciation and amortisation -22719 -2575 shy25294

Disposals ndash shy19 shy19



Changeintheconsolidatedgroupndash additions

18532 ndash 18532

Additions 167853 2580 170433


Depreciation and amortisation -25571 -3166 -28737



[48] Assets held for sale

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Investment securities 39218 37740 1478

Total 39218 37740 1478

74


[49] Liabilities to banks

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Liabilities to banks in Germany 30101 26884 3217

Liabilities to banks outside Germany 0 ndash 0

Total 30101 26884 3217

[50] Liabilities to customers

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Liabilities to customers in Germany 1503 1137 366

Liabilities to customers outside Germany 22 30 -8

Total 1525 1167 358

[51] Liability derivatives

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

In connection with guarantee commitments 179852 87166 92686


Total 179852 96641 83211

[52] Provisions

31 Dec 2020

EUR thousand

31122019

EUR thousand

Change

EUR thousand


Provisionsfordefinedbenefit pensionobligations

153334 137642 15692

Provisionsforotherlong-term employeebenefits

85604 73726 11878

ofwhichprovisionsforpartial retirement schemes

35671 21737 13934

ofwhichmiscellaneousprovisionsforotherlong-termemployeebenefits

49933 51989 -2056

Provisionsforterminationbenefits 559 556 3

ofwhichprovisionsfortermination benefitslinkedwithrestructuring

559 556 3


Miscellaneous provisions 17885 16735 1150

Total 257382 228659 28723

Provisionsfordefinedbenefitpensionobligations

TheprovisionsfordefinedbenefitplanscomprisebothclosedpensionschemesthatarenolongeracceptingnewparticipantsandopenschemesforamongothersboardmembersandmanagingdirectorsNewemployeesinGermanyarealmostalwaysofferedonlydefinedcontributionpensionplansforwhichnoprovisionshavetoberecognisedThepictureoutsideGermanyismorevariedbecausetherearebothdefinedcontributionanddefinedbenefitplansthatareopentoasmallproportionofnewemployeesOveralltheproportionofthegrouprsquostotalobligationsaccountedforbyobligationsoutsideGermanyisnotmaterial

75


ThecostofdefinedcontributionplanswasEUR-5665thousandinthefinancialyear(previousyearEUR-5486thousand)andisrecognisedinadministrativeexpensesunderpensionsandotherpost-employmentbenefitexpenses

Thepresentvalueofdefinedbenefitobligationsisbrokendownbyriskclassasfollows

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Germany 393413 358527 34886

Final salaryshydependent plans 185528 165306 20222

Definedbenefitcontributionplan 207885 193221 14664

Rest of world 7619 6972 647

Final salaryshydependent plans ndash ndash ndash


Total 401032 365499 35533

Thefinalsalary-dependentpensionobligationsaretheemployerrsquospensionobligationstoemployeestheamountofwhichdependsontheemployeersquosfinalsalarybeforetheinsuredeventoccurredForthemostparttheycanbeassumedtoconstitutealife-longpaymentobligationInGermanySection16(1)oftheOccupationalPensionsAct(BetrAVG)requiresthepensionamounttobeadjustedeverythreeyearstoreflectthechangeinconsumerpricesornetwagesThemainriskfactorsforfinalsalary-dependentpensionplansarethereforelongevitychangesinsalaryinflationriskandthediscountrate

Asignificantriskfactorndashoverwhichthecompanyhasnoinfluencendashisthelevelofmarketinterestratesforinvestment-gradefixed-incomecorporatebondsbecausetheresultinginterestaffectsboththeamountoftheobligationsandthemeasurementoftheplanassetsThisriskcanbelimitedbymeansofappropriateplanstructuringorassetinvestmentinordertomatchtheobligationsandtheplanassets

ThemajorityofdefinedbenefitcontributionplanscompriseobligationstopayfixedcapitalamountsoramountsatfixedinterestratespartofwhicharepaidbytheemployeeandpartbytheemployerThemostprevalentpensionschemeisfundedbyemployeespayingpartoftheirsalaryintotheschemeUndertheothersignificantschemethecontributionsarelinkedtoremunerationandmustbepaidbytheemployerHoweverthispensionschemeisclosedtonewemployees

ThepensionplansinGermanyarenotsubjecttominimumfundingrequirementsSomepensionplansoutsideGermanyaregovernedbylocalregulationsbutthesedonotincludeminimumfundingrequirements

Thechangesinthepresentvalueofthedefinedbenefitobligationswereasfollows

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Opening balance as at 1 Jan 365499 315731 49768

Current service cost 7908 6718 1190

Interest cost 3660 5540 shy1880

Current pension payments shy5845 shy5985 140

Employeecontributions 5380 4675 705

Actuarialgains(-)losses(+) 24430 38820 shy14390

ofwhichfromexperienceadjustments 12275 10118 2157

ofwhichfromchangestofinancial assumptions

12155 28702 -16547

Closing balance as at 31 Dec 401032 365499 35533

Thefollowingactuarialassumptionswereusedinthemeasurementofdefinedbenefitpensionobligations

31 Dec 2020

31 Dec 2019

Change

Percentage points

Discount rate 075 100 -025

Salary increases 000 ndash 250 000 ndash 250 ndash

Pension increases 000 ndash 300 000 ndash 300 ndash

Staff turnover 000 ndash 600 000 ndash 600 ndash

Basedonthepresentvalueofthedefinedbenefitpensionobligationstheweightedabsolutepercentagesforthesalaryincreaseparameterandpensionincreaseparameterare14(previousyear14)and14(previousyear14)respectivelyTheweightedabsolutepercentageforstaffturnoveris07(previousyear08)

76


Sensitivity analysis

ThefollowingtableshowsthesensitivityofthedefinedbenefitpensionobligationstothemainactuarialassumptionsTheeffectsshownarebasedonanisolatedchangetooneassumptionwiththeotherassumptionsremainingthesameCorrelationeffectsbetweenindividualparametersarenotconsidered

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Change in the present value of defined ben-efit pension obligations as at the end of the reporting period if

401032 365499 35533

the discount rate was 100basispointshigher

shy43339 shy40154 shy3185

the discount rate was 100basispointslower

58658 54234 4424

thefuturesalaryincreaseswere 50basispointshigher

4788 3313 1475

thefuturesalaryincreaseswere 50basispointslower

shy4545 shy5134 589

thefuturepensionincreaseswere 25basispointshigher

6630 5831 799

thefuturepensionincreaseswere 25basispointslower

-6309 shy5554 -755

thefuturelifeexpectancywas one year longer

7132 6352 780

thefuturelifeexpectancywas one year shorter

-7327 -6540 -787

Thedurationofthedefinedbenefitobligationsasattheendofthefinancialyearwas14yearsforGermany(previousyear14years)andelevenyearsfortherestoftheworld(previousyearelevenyears)

Plan assets

Thefundingstatusofthedefinedbenefitpensionobligationsisshowninthefollowingtable

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Present value of defined benefit pension obligations

401032 365499 35533

ofwhichnotfundedbyplanassets 84832 79729 5103

ofwhichfundedbyplanassets 316200 285770 30430

Defined benefit pension obligations (net) -247806 -227857 -19949

Defined benefit pension obligations (net) 153226 137642 15584

Funding surplus 108 ndash 108

Provisions recognised for defined benefit pension obligations

153334 137642 15692

Fairvalueofreimbursementrights 12280 11011 1269

Thefollowingtableshowsthechangesinplanassets

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Interest income 2310 3458 shy1148

Incomefromexpensesforplanassets (notincludinginterestincome)

10175 25955 -15780

Fundingofplanassets 11844 9161 2683

ofwhichcontributionsbyemployers 6477 4499 1978

ofwhichcontributionsbyemployees 5367 4662 705

Pensionbenefitspaid shy4380 -4916 536


77


TheactualincomefromplanassetsamountedtoEUR12485thousandintheyearunderreview(previousyearEUR29413thousand)

AdditionalcontributionstoplanassetsofEUR11555thousandareexpectedinthesubsequentfinancialyear(previousyearEUR8904thousand)

TheplanassetsmainlycompriseentitlementsarisingfrominsurancecontractsandinvestmentfundunitswithbroadlydiversifiedportfoliosTherisksattachedtoplanassetsinconnectionwithentitlementsarisingfrominsurancecontractsarereviewedregularlybythepensionprovidersVGUeVandRVPinordertodeterminethefundingratiofortheobligation

Thepensionobligationsandtheplanassetsareintheeurozone

Thefairvalueoftheplanassetsisbrokendownbyassetclassasfollows

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Investment fund units (securities funds) minus no market price quoted on an active market

148376 133815 14561

Investment fund units (real estate funds) minus no market price quoted on an active market

571 500 71

Entitlements arising from insurance contracts 98859 93542 5317

Total 247806 227857 19949

Reimbursementrights

Thefollowingtableshowsthechangesinreimbursementrights

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Interest income 110 166 -56

Incomefromexpensesforreimbursementrights(notincludinginterestincome)

shy538 189 -727

Fundingofreimbursementrights 1717 1280 437


ofwhichcontributionsbyemployees 13 13 ndash

Pensionbenefitspaid shy20 shy139 119


TheactualincomefromreimbursementrightsamountedtoEUR-428thousandintheyearunderreview(previousyearEUR355thousand)

Changes in other provisions

Miscellaneous provisions

Total

EUR thousand EUR thousand


Additions 1087 1087

Utilisation -778 -778

Reversals shy140 shy140

Effectfromtheincreaseinthediscountedamountover time and change in the discount rate

20 20


78


Theremainingtermsofotherprovisionsareshowninthetablebelow

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to three months 0 ndash 0

Three months to one year 556 604 shy48

Oneyeartofiveyears 7303 7300 3

Morethanfiveyears 9018 8604 414

Indefinite 1008 227 781

[53] Income tax liabilities

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Current income tax liabilities 57055 66531 -9476

Provisionsforincometaxes 57054 66290 -9236

Incometaxliabilities 1 241 shy240

Deferred tax liabilities 2876 1975 901

Deferredtaxliabilities (recognisedinprofitorloss)

162120 73284 88836

Deferredtaxliabilities (recognisedinequity)

17918 7129 10789

Netting -177162 -78438 -98724

Total 59931 68506 -8575

ProvisionsforincometaxesaretaxliabilitiesforwhichafinalandbindingtaxassessmentnoticehasnotyetbeenissuedIncometaxliabilitiesincludepaymentobligationsforcurrentincometaxesowedtotaxauthoritiesbothinGermanyandinothercountries

DeferredtaxliabilitiesrepresentthepotentialincometaxexpensefromtemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesintheIFRSconsolidatedstatementoffinancialpositionandthetaxaccountsinaccordancewithlocaltaxregulationsforthecompanies intheUMHGroupDeferredtaxliabilitiesthatwereonlyexpectedtobeincurredaftertwelvemonthsamountedtoEUR2045thousand(basedontheirnetvaluepreviousyearEUR1159thousand)

Deferredtaxliabilitieswererecognisedinconnectionwiththefollowingstatementoffinancialpositionitems

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets


Investmentsinsubsidiariesandequityinvestments

1613 346 1267

Propertyplantandequipment 8 11 shy3

Intangibleassets 23947 4004 19943

Other assets 147 589 shy442

Rightofuseassets 95690 32520 63170


Liabilityderivatives 29 ndash 29


Other provisions 61 90 shy29


Total 180038 80413 99625

79


[54] Other liabilities

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Other financial liabilities 13025 18391 -5366

Liabilitiesfromcapitalisedrentalsoftware 5851 5780 71

Tradepayables 4753 576 4177

Miscellaneousotherliabilities 2421 12035 -9614

Financial liabilities from contingent consider-ation through business combinations

ndash 5000 -5000

Other tax liabilities 46696 51159 -4463

Deferred liabilities 805850 780460 25390

ofwhichforsalescommission 630522 596377 34145

Miscellaneous other liabilities 76 148 -72

Deferred income 48 25 23

Total 865695 855183 10512


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Operating and office equipment 5356 5966 -610

Total 302421 104140 198281

[56] Equity

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Issued capital 87130 87130 ndash

Capital reserves 18617 18617 ndash

Retained earnings 1171839 919363 252476

Fair value OCI reserve 20362 20496 -134

Currency translation reserve 8203 12811 -4608

Consolidated net profit 450752 472330 -21578


Total 1788159 1554526 233633

Issued capital

TheissuedcapitalcorrespondstothesharecapitalofUMHAGItamountstoEUR87130thousand(previousyearEUR87130thousand)andisdividedinto29043466(previousyear29043466)fullypaidregisteredno-par-valuesharesTheUMHGroupdidnotholdanytreasurysharesattheendofthereportingperiodTherewerenopreferentialrightsorrestrictionsinrelationtothedistributionofdividends

AdividendofEUR689pershare(previousyearEUR847pershare)wasdistributedtoshareshyholdersinthereportingyearinaccordancewiththeresolutionadoptedbytheAnnualGeneralMeetingon15May2020ThisequatestoatotaldividendpaymentofEUR200109thousand(previousyearEUR245998thousand)

ThepaymentofadividendofEUR796persharewillbeproposedattheAnnualGeneralMeeting on17May2021ThisequatestoatotaldividendpaymentofEUR231186thousandTheSupervisoryBoardofUMHAGapprovedtheproposedappropriationofprofitatitsmeetingheldon26February2021

Capital reserves

Thecapitalreservescomprisethepremiumsarisingontheissueofsharesinthecompany

80


Retained earnings

RetainedearningscomprisetheundistributedearningsfromprioryearsactuarialgainsandlossesondefinedbenefitplansandplanassetsinaccordancewithIAS19120(c)andonreimbursementrightsinaccordancewithIAS19116togetherwiththeeffectsofthefirst-timeapplicationofIFRS

Breakdownofchangesinretainedearningsbycomponentofothercomprehensiveincome

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Actuarial gains and losses on defined benefit plans

-17168 -4997 -12171

Total -17168 -4997 -12171


ThefairvalueOCIreservecomprisestheeffectsfromtheremeasurementofthefairvalueoffinancialinstrumentsldquoatfairvaluethroughprofitorlossrdquo(netoftheassociateddeferredtaxes)beforetheseeffectscanberecognisedinprofitorlossTheseinstrumentsarenotrecognisedthroughprofitorloss

BreakdownofchangesinfairvalueOCIreservebycomponentofothercomprehensiveincome

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Gains and losses from equity instruments for which the fair value OCI option was exercised

-134 1801 -1935

Total -134 1801 -1935

Currency translation reserve

Theeffectsofexchangeratesarisingwhenthefinancialstatementsofgroupcompaniesdenominatedinforeigncurrencyaretranslatedintothegroupreportingcurrency(euro)arereportedinthecurrencytranslationreserve

Breakdownofchangesinthecurrencytranslationreservebycomponentofothercomprehensiveincome

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Share of other comprehensive income of joint ventures and associates accounted for using the equity method

-4608 1663 -6271

Total -4608 1663 -6271

Reservefromassetsheldforsale

Inthepreviousyeartheseitemsincludedcomponentsofequityofasubsidiaryheldforsalethatdidnotrepresentacomponentofanentity

Changeinreservefromassetsheldforsale

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Exchange differences on currency translation of foreign subsidiaries

ndash -8 8

Total ndash -8 8

Non-controllinginterests

Non-controllinginterestscomprisetheshareofsubsidiariesrsquoequitynotattributabletoUMHAG

Breakdownofchangesinnon-controllinginterestsbycomponentofothercomprehensiveincome

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-57 61 -118


-211 -378 167

Total -268 -317 49

81


Financial instruments disclosures

[57] Categories of financial instruments

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Financial assets measured at amortised cost 845010 818432 26578

Loansandadvancestobanks 584132 538462 45670

Loans and advances to customers 80211 109442 shy29231

Otherfinancialreceivables 180667 170528 10139

Financial liabilities measured at amortised cost

44651 40663 3988

Liabilitiestobanks 30101 26884 3217

Liabilitiestocustomers 1525 1167 358

Otherfinancialobligations 13025 12612 413

Lease liabilities 302421 104140 198281

Financial assets mandatorily measured at fair value through profit or loss

1726054 1539905 186149



Asset derivatives ndash 28136 -28136

Assetsheldforsale 39218 37740 1478

Financial assets measured at fair value through other comprehensive income

64108 32477 31631

Investment securities

Equitiesandothervariable-yieldsecurities(includingothershareholdings)

7304 6116 1188

Investmentsinsubsidiaries 56804 26361 30443

Financial liabilities at fair value through profit or loss

179852 101641 78211


Financialliabilitiesfromcontingentconsidera-tionthroughbusinesscombinations

ndash 5000 shy5000

IntheUMHGroupthefairvalueOCIoptioniscurrentlyexercisedforallequityinvestmentsandunconsolidatedsubsidiariesTheUMHGroupconsidersthisclassificationofstrategicfinancialinvestmentsasmoremeaningfulForeachnewinvestmentitisdecidedonacase-by-casebasishowthisinvestmentshouldbeclassifiedDividendsofEUR1406thousandwererecognisedfromthesefinancialinstrumentsinthefinancialyear(previousyearEUR1607thousand)Due tothedisposaloftwo(previousyearone)equityinvestmentsandone(previousyearnone)liquidationtheaccruedfairvalueOCIreserveofEUR0thousand(previousyearEUR6thoushysand)wasreclassifiedtoretainedearningsNodividend(previousyearEUR02thousand)wasattributabletotheseequityinvestments

ThefairvalueOCIoptionisexercisedforallinvestmentsinequityinstruments

Assets recognised at fair value through profit or loss (recognised initially in other comprehensive income)

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Interests in unconsolidated subsidiaries 56804 26361 30443

Total 64108 32478 31630

Inthecurrentperiodtherewerenoreclassificationsoffinancialassetsbetweenthemeasurementcategories

82


[58] Exposure to credit risk

Investment grade NR ndash not rated or no rating required

31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand

Loans and advances to banks 578304 ndash ndash ndash 5829 ndash 584133

ofwhichcurrentaccount 578304 ndash ndash ndash ndash ndash 578304

ofwhichinGermany 558087 ndash ndash ndash ndash ndash 558087

ofwhichinotherEUcountries 20016 ndash ndash ndash ndash ndash 20016

ofwhichother 201 ndash ndash ndash ndash ndash 201

ofwhichtradereceivables ndash ndash ndash ndash 5829 ndash 5829

ofwhichinGermany ndash ndash ndash ndash 2817 ndash 2817

ofwhichinotherEUcountries ndash ndash ndash ndash 2387 ndash 2387

ofwhichother ndash ndash ndash ndash 625 ndash 625

Loans and advances to customers

251 ndash ndash ndash 79858 102 80211

ofwhichretailclients ndash ndash ndash ndash 6921 101 7022

ofwhichinGermany ndash ndash ndash ndash 6921 101 7022

ofwhichinotherEUcountries ndash ndash ndash ndash ndash ndash ndash

ofwhichother ndash ndash ndash ndash ndash ndash ndash

ofwhichtoother financialinstitutions

251 ndash ndash ndash 69938 ndash 70189

ofwhichinGermany 251 ndash ndash ndash 32117 ndash 32368



ofwhichtoothers ndash ndash ndash ndash 2999 1 3000





31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand

Other financial receivables ndash ndash ndash ndash 180667 ndash 180667

ofwhichtoinvestmentfunds ndash ndash ndash ndash 176967 ndash 176967




ofwhichtoothers ndash ndash ndash ndash 3700 ndash 3700




Total 578555 ndash ndash ndash 266354 102 845011

83



31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand











ndash ndash ndash ndash 109442 ndash 109442

ofwhichretailclients ndash ndash ndash ndash 7912 ndash 7912




ofwhichtootherfinancialinstitutions










31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand










Total 533992 ndash ndash ndash 284439 ndash 818431

Therewerenoreceivableswithanon-investmentgraderatinginthefinancialyearorinthepreviousyear

ThecarryingamountisthemaximumcreditriskforthefinancialinstrumentsmeasuredatfairvaluePleaseseenote[73]forthemaximumcreditriskofthefinancialguaranteesissued

84


[59] Gross carrying amounts and allowances for losses

Financialassetsmeasuredatamortisedcost

Loans and advances to banks Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand

Opening balance as at 1 Jan 2019 507222 5074 ndash 512296

Additionofnewfinancialassets 13285001 43358 ndash 13328359

Transferinaccordancewithassetsheldforsale ndash ndash ndash ndash

Transferfromstage1 ndash ndash ndash ndash



Transfertostage1 ndash ndash ndash ndash



Directly recognised impairment losses ndash ndash ndash ndash

Disposalsandrepaymentoffinancialassets -13258266 -43962 ndash shy13302228

Increaseincarryingamountduetomodification ndash ndash ndash ndash

Decreaseincarryingamountduetomodification ndash ndash ndash ndash

Netofamortisationmarketvaluechangesandother measurement changes

ndash ndash ndash ndash

Differencesoncurrencytranslation 36 1 ndash 37

Closing balance as at 31 Dec 2019 533992 4470 ndash 538462


EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand


Changeintheconsolidatedgroupndashadditions 36546 ndash ndash 36546










Disposalsandrepaymentoffinancialassets -13632534 shy51481 ndash -13684015





Differencesoncurrencytranslation -65 4 ndash -61


85


Loans and advances to customers Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand


Additionofnewfinancialassets ndash 450248 ndash 450248








Directly recognised impairment losses ndash shy55 ndash shy55

Disposalsandrepaymentoffinancialassets -16 shy424302 ndash shy424318





Differencesoncurrencytranslation ndash 6 ndash 6

Closing balance as at 31 Dec 2019 ndash 109442 ndash 109442


EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand

Opening balance as at 1 Jan 2020 ndash 109442 ndash 109442

Changeintheconsolidatedgroupndashadditions 955 1534 ndash 2489




Transferfromstage2 ndash ndash 111 111




Transfertostage3 ndash shy111 ndash shy111

Directly recognised impairment losses ndash shy12 -6 shy18

Disposalsandrepaymentoffinancialassets -704 shy451120 shy3 -451827






Closing balance as at 31 Dec 2020 251 79858 102 80211

86


Other financial receivables Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand











Disposalsandrepaymentoffinancialassets ndash -2250789 ndash -2250789








EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand


Changeintheconsolidatedgroupndashadditions ndash 1394 ndash 1394















Differencesoncurrencytranslation ndash shy11 ndash shy11


InthepastfinancialyearandintheyearpriornoallowancesforlossesonloansandreceivableswererecognisedinaccordancewithIFRS955asthecalculatedamountwasnotmaterialTherearenocreditlossesonpurchasedororiginatedcredit-impairedassets(POCI)

Thegrosscarryingamountsshowninthetablesunderstage2deriveentirelyfromtheassetsheldunderthesimplifiedapproach

87


[60] Items of income expense gains and losses

Netgainsandlosses

ThebreakdownofnetgainsandlossesonfinancialinstrumentsbyIFRS9categoryforfinancialassetsandfinancialliabilitiesisasfollows

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Financial instruments at fair value through profit or loss

-81081 -33073 -48008

Financial assets mandatorily measured at fairvaluethroughprofitorloss

shy81081 -33073 shy48008

Financial instruments at fair value through other comprehensive income

1398 1607 -209

Financialassetsmeasuredatfairvalue through other comprehensive income

1398 1607 shy209

Measured at amortised cost -1573 -2047 474

Assets measured at amortised cost shy1491 -970 shy521

Liabilitiesmeasuredatamortisedcost shy82 -1077 995

NetgainsornetlossescomprisegainsandlossesonfairvaluemeasurementthroughprofitorlossimpairmentlossesandreversalsofimpairmentlossesandgainsandlossesonthesaleorearlyrepaymentofthefinancialinstrumentsconcernedTheseitemsalsoincludeinterestincomeexpensesandcurrentincome

Interest income and expenses

Thefollowingtotalinterestincomeandexpensesaroseinconnectionwithfinancialassetsandfinancialliabilitiesthatarenotmeasuredatfairvaluethroughprofitorloss

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Interest expenses and negative interest on financial assets

-1605 -2109 504

[61] Fair values

IfthereisanactivemarketforfinancialassetsandfinancialliabilitiesthefairvalueisbasedontherelevantmarketpriceasattheendofthereportingperiodThefairvaluesofinvestmentfundunitsaretheredemptionprices(netassetvalue)publishedbytherelevantassetmanagementcompaniesinaccordancewithrequirementsundernationalinvestmentlawIfthecontractualconditionsofafundstipulatearedemptionchargethefairvalueisreducedbythischarge

Thefairvalueofinvestmentsecuritiesclassifiedasequityinstrumentsthatarenotquotedonanactivemarketisdeterminedusinganincomecapitalisationapproachbasedonparameterssuchasforecastscalculatedfreecashflowsbetafactorsorrisk-adjustedandinterpolatedinterestratesbasedonthebasicdiscountcurve

Owingtotheshortremainingtermthecarryingamountisusedasarealisticestimateofthefairvalueoffinancialresourcescurrenttradereceivablesandotherreceivablescheckingaccountandinstant-accessdepositswithbankscurrenttradepayablesandotherpayablescheckingaccountliabilitiestobanksandborrowingwithorwithoutaninterestratethatisfixedintheshortterm

ThecarryingamountsofthefinancialassetsinthetablereflecttheamountthatbestrepresentsthecompanyrsquosmaximumexposuretocreditriskasattheendofthereportingperiodCollateralandothercreditenhancementsheldwerenottakenintoaccountThenegativemarketvaluefromderivativefinancialinstrumentsessentiallycomprisedEUR168078thousand(previousyearEUR77000thousand)fromcapitalpreservationcommitmentsfortheUniProfiRenteretirementpensionproductandEUR11774thousand(previousyearEUR10165thousand)fromminimumpaymentcommitmentsinconnectionwithguaranteefundslaunchedbyassetmanagementcompaniesbelongingtothegroup

88


Themeasurementmethodsdescribedaboveareusedtodeterminethefairvaluesofallclassesoffinancialinstrument

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Loansandadvancestobanks(fairvalue) 592026 541495 50531

Loansandadvancestobanks(carryingamount) 592026 541495 50531

Loansandadvancestocustomers(fairvalue) 80211 109442 shy29231

Loans and advances to customers (carryingamount)

80211 109442 shy29231

Assetderivatives(fairvalue) ndash 28136 -28136

Assetderivatives(carryingamount) ndash 28136 -28136

Investmentsecurities(fairvalue) 1743050 1503473 239577

Investmentsecurities(carryingamount) 1743050 1503473 239577

Otherfinancialreceivables(fairvalue) 180667 170528 10139

Otherfinancialreceivables(carryingamount) 180667 170528 10139

Assetsheldforsale(fairvalue) 39218 37740 1478

Assetsheldforsale(carryingamount) 39218 37740 1478

Equity and liabilities 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Liabilitiestobanks(fairvalue) 30101 26884 3217

Liabilitiestobanks(carryingamount) 30101 26884 3217

Liabilitiestocustomers(fairvalue) 1525 1167 358

Liabilitiestocustomers(carryingamount) 1525 1167 358

Liabilityderivatives(fairvalue) 179852 96641 83211

Liabilityderivatives(carryingamount) 179852 96641 83211

Otherfinancialliabilities(fairvalue) 13025 18391 -5366

Otherfinancialliabilities(carryingamount) 13025 18391 -5366

Financialliabilitiesfromcontingentconsiderationthroughbusinesscombinations(fairvalue)

ndash 5000 shy5000

Financialliabilitiesfromcontingentconsiderationthroughbusinesscombinations(carryingamount)

ndash 5000 shy5000

89


[62] Fair value hierarchy

Assetsandliabilitiesmeasuredatfairvalueinthestatementoffinancialposition

Therecurringfairvaluemeasurementsareassignedtothelevelsofthefairvaluehierarchyasfollows

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Loans and advances to banks 7894 3033 4861

ofwhichlevel1 ndash ndash ndash

ofwhichlevel2 7894 3033 4861





ofwhichlevel3 ndash 28136 -28136



ofwhichlevel2 1674495 1462924 211571

ofwhichlevel3 68555 40550 28005

Assets held for sale 39218 37740 1478




Total 1790162 1572382 217780


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Liability derivatives 179852 96641 83211


ofwhichlevel2 179852 87165 92687


Financial liabilities from contingent conside-ration through business combinations

ndash 5000 -5000



ofwhichlevel3 ndash 5000 shy5000

Total 179852 101641 78211

Level 1 fairvaluemeasurementsarederivedfromquotedpricesinactivemarketsforidenticalfinancialassetsorliabilities

Level 2fairvaluemeasurementsarebasedoninputsotherthanquotedpricesincludedinlevel1thatareobservablefortheassetorliabilityeitherdirectly(ieasprices)orindirectly(iederivedfromprices)Investmentfundunitsheldforown-accountinvestingactivitiesareassignedtothislevelofthefairvaluehierarchy

Level 3fairvaluemeasurementsusemodelswithinputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs)

90


Reclassifications

Assetsheldattheendofthereportingperiodandmeasuredatfairvalueonarecurringbasiswerenotreclassifiedbetweenlevels12and3inthefinancialyear

Transfersbetweenlevels1and2takeplacewhenthereisachangeintheinputsthatisrelevant tocategorisationinthefairvaluehierarchy

Fair value measurements at level 3

Thetablebelowshowsthechangesintherecurringfairvaluemeasurementsoflevel3liabilities inthefinancialyear

Asset derivatives 2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Opening balance as at 1 Jan 28136 48924 -20788

Changesresultingfrommeasurement atfairvalue

1615 -20787 22402

ofwhichthroughprofitorloss 1615 -20787 22402

Disposals(sales) -29751 ndash -29751

Closing balance as at 31 Dec ndash 28136 -28136

Investment securities 2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Additions(purchases) 1455 4051 -2596

Additionofsubsidiaries(acquisition) 31747 ndash 31747


shy3803 2133 -5936

ofwhichthroughprofitorloss -3687 251 shy3938

ofwhichinequity -116 1882 shy1998

Disposals(sales) shy1394 shy1000 shy394


Thetablebelowshowsthechangesintherecurringfairvaluemeasurementsoflevel3liabilitiesinthefinancialyear

Liability derivatives 2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



4415 1638 2777

ofwhichthroughprofitorloss 4415 1638 2777

Disposals(sales) shy13891 ndash shy13891



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Opening balance as at 1 Jan 5000 5000 ndash



AspartoftheprocessesforfairvaluemeasurementtheUMHGroupreviewswhetherthemeasurement methods used are still typical and whether the measurement parameters used in themeasurementmethodsareobservableinthemarketThisreviewtakesplaceattheendofeachreportingperiodOnthebasisofthisreviewthefairvaluesareassignedtothelevelsofthefairvaluehierarchyIntheUMHGrouptransfersbetweenthelevelstakeplaceassoonasthereisachangeintheinputsthatisrelevanttocategorisationinthefairvaluehierarchyIneachstepofthisprocessboththedistinctivefeaturesoftheparticularproducttypeandthedistinctivefeaturesofthebusinessmodelsofthegroupentitiesaretakenintoconsideration

ThecallandputoptionstosharesofZBIPartnerschafts-HoldingGmbHweremeasuredasfollowsforthelasttimeatthedateofthebusinesscombinationThecalculationofenterprisevaluewasbasedonarisk-adjustedinterestrateof104(previousyear104)a360-dayvolatilityof480andrisk-freeinterestratesofzerowereusedintheBlack-Scholesmodel(previousyear360-dayvolatilityof266andrisk-freeinterestratesofzero)ThelossofEUR-2800thousand(previousyearEUR-22425thousand)inthereportingyearisreportedinprofitorlossunderothernetremeasurementincomeonfinancialinstruments

91


ThelossfromassetsreportedunderfinancialassetsofEUR-3687thousand(previousyearEUR251thousand)inthereportingyearisreportedinprofitorlossunderothernetremeasurementincomeonfinancialinstrumentsThelossrecognisedinequityofEUR-116thousand(previousyearEUR1882thousand)isreportedinthestatementofcomprehensiveincomeundergainsandlossesonequityinstruments

Thefairvalueoflevel3investmentsinsubsidiariesisdeterminedonthebasisofdiscountedcashflowmethodsusingtheunobservableinputsfuturecashflowsandrisk-adjustedinterestratesTherisk-adjustedinterestratesrangedbetween87and113(previousyearbetween89and105)Foraninvestmentinastart-upapre-moneyvaluationwasimplementedonthebasisofthemeasurementforthelastroundoffinancingThelsquoInvestmentsecuritiesrsquoitemcontainsunitsininvestmentfunds(unitsinprivateequityfunds)Thefairvalueistheredemptionpricepublishedbytheassetmanagementcompaniesinlinewithnationalinvestmentlawprovisions(netassetvalue)Thecalculationoftheredemptionpriceisessentiallybasedonthediscountedcashflowvaluessentbythird-partymanagersofthefundsinquestion

Nosensitivityanalysisisperformedforinvestmentsecuritiesandassetandliabilityderivativeswhosefairvalueisdeterminedonthebasisofmeasurementmodelsastheresultingeffectsareimmaterial

Assetsandliabilitiesnotmeasuredatfairvalue

Recurringfairvaluemeasurementsofassetsandliabilitiesthatarenotrecognisedatfairvalueinthestatementoffinancialpositionbutwhosefairvaluemustbedisclosedareassignedtothelevelsofthefairvaluehierarchyasfollows

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 584132 538462 45670


Loans and advances to customers 80211 109442 -29231


ofwhichlevel2 80211 109442 shy29231




ofwhichlevel2 180667 170528 10139


Total 845010 818432 26578

92



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Liabilities to banks 30101 26884 3217




Liabilities to customers 1525 1167 358








Total 44651 46443 -1792

Inotherfinancialliabilitiestheliabilitiesfromrentalsoftwareareassignedtofairvaluelevel3AsthesearepredominantlycurrentliabilitiesthecarryingamountrecognisedisequaltothefairvalueUncertaintiesduringmeasurementresultfromexercisingrenewalandterminationoptionsinfuture

[63] Contractual maturity analysis

Thematurityanalysisshowsthecontractuallyagreedcashinflowsandoutflows

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 591927 541487 50440

One month to three months 99 8 91

Three months to one year ndash ndash ndash

Oneyeartofiveyears ndash ndash ndash

Morethanfiveyears ndash ndash ndash

Indefinite ndash ndash ndash


Up to one month 70417 96465 -26048

One month to three months 2564 3887 shy1323

Three months to one year 277 2573 -2296


Morethanfiveyears 3199 3236 -37



Up to one month ndash ndash ndash

One month to three months ndash ndash ndash


Oneyeartofiveyears ndash 28136 -28136









Indefinite 1743050 1503473 239577

93


Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 171443 167897 3546


Three months to one year 6402 1874 4528

Oneyeartofiveyears 10 60 shy50


Indefinite 3 6 shy3







Indefinite 39218 37740 1478


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 30101 26884 3217







Up to one month 1525 1167 358






Liability derivatives 57065 101131 -44066




Oneyeartofiveyears 10288 14974 -4686









Indefinite 1242 ndash 1242

94



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ndash 5000 ndash




Oneyeartofiveyears ndash 5000 ndash










IntheabovetabletheundiscountedcontractualpaymentobligationsfromthecapitalpreservationandguaranteecommitmentsofallUniProfiRentecontractsandguaranteefundslesstheassetsallocatedtothesecontractsasattheendofthereportingperiodwerereportedunderliabilityderivativesprovidedthecapitalpreservationorguaranteecommitmentsofthesecontractshadanegativefairvalueasattheendofthereportingperiod

InthepreviousyeartheliabilityderivativesincludedtheexercisepricesoftheputoptionsforsharesinZBIPartnerschafts-HoldingGmbHErlangenwrittenbyUMH

Other disclosures 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Financial guarantees 50827 55749 -4922






Indefinite 50827 55749 shy4922

Nominalamountsareshownforfinancialguaranteeswhichdonotreflecttheirexpectedoutflows

95


[64] Foreign currency volumes

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Loans and advances to banks 406 1401 -995

USdollar(USD) 210 692 shy482

Swissfranc(CHF) ndash ndash ndash

Japaneseyen(JPY) ndash ndash ndash

Poundsterling(GBP) 161 669 shy508

Polishzloty(PLN) ndash ndash ndash

HongKongdollar(HKD) ndash ndash ndash

Otherforeigncurrencies 35 40 shy5



Swissfranc(CHF) 340 345 shy5








Swissfranc(CHF) 1555 960 595






Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Other financial receivables 196 248 -52







Otherforeigncurrencies ndash ndash ndash

Total 3720 5651 -1931

96



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Swissfranc(CHF) 4 4 ndash


Poundsterling(GBP) ndash ndash ndash

Polishzloty(PLN) 20 ndash 20



Lease liabilities 1466 2268 -802




Poundsterling(GBP) ndash 454 shy454




Total 5533 6818 -1285


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 50827 55749 -4922

Thenominalamountisreportedforfinancialguarantees

97


Other disclosures

[65] Equity management

AsasubsidiaryofDZBANKUMHAGisnotsubjecttoseparateconsolidatedsupervisionasabankinggroupundertheGermanBankingAct(KWG)andconsequentlynorisitsubjecttoanyregulatorycapitalrequirementsattheUMHGrouplevelHoweversomeofthecompaniesintheUnionInvestmentGrouparendashattheindividualbanklevelndashsubjecttoregulatorycapitalrequireshymentsundernationallegislationwhichwascompliedwithatalltimesinthereportingyearRegulatorycapitalrequirementsintheFederalRepublicofGermanyarespecifiedforassetmanagementcompaniesbySection25ofGermanyrsquosInvestmentCode(KAGB)andforUnionInvestmentServiceBankAGQuoniamAssetManagementGmbHandVisualVestGmbHbyEuropeanRegulationNo5752013(CRR)inconjunctionwithSection10KWGTheBoardofManagingDirectorsofUMHAGalsousesthecorporateguidelinesonintegratedriskandcapitalmanagementasthebasisforensuringappropriatecapitaladequacyintheUnionInvestmentGroupTheaggregateriskiscomparedagainsttheavailableaggregateriskcoverforagivenanalysisperiodinordertomakesurethatwithaspecifiedconfidencelevelthepotentiallossesdonotexceedtheaggregateriskcoverAggregateriskcovercomprisestheequityreportedinthestatementoffinancialpositionandquasi-equitycomponentsandalsotakesintoaccounthiddenreservesandliabilitiesthatwouldariseintheeventofalossPleaserefertothestatementofchangesinequityforfurtherinformationonthecompositionofandchangesinequityAdditionaldetailsonriskmanagementcanalsobefoundintheriskreportinthegroupmanagementreport

[66] Disclosures of revenue from contracts with customers

Allocationofrevenuefromcontractswithcustomers

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Revenue elements





Other 119407 113493 5914


Total revenue elements 2788224 2634459 153765

Geographical key markets

Germany 2147713 2053096 94617

Other EU countries 640511 581363 59148

Restoftheworld ndash ndash ndash

Total geographical key markets 2788224 2634459 153765

Type of sales recognised

At a point in time 448874 429405 19469

Overaperiodoftime 2339350 2205054 134296

Total amount of sales recognised 2788224 2634459 153765

The asset management services provided typically do not give rise to any contractual assets due totheperiodicsettlementsAsnoadvanceconsiderationsarepaidbycustomersnocontract liabilitiesarise

ContractswithcustomersforwhichtheproceedscontainsignificantfinancingcomponentshavenotbeenidentifiedThepracticalexpedientgrantedinIFRS1563wasappliedhereunderwhichtransactionpricesmaynotbeadjustedinrelationtotheeffectsofasignificantfinancingcomposhynentifthecustomerexpectstopayatthelatestwithinoneyearafterthetransferoftheassetsorservicespromised

98


ThecontractswithcustomersconcludedbytheUMHGroupalwaysgrantaclaimtoaconsiderationtobepaidbythecustomerinanamountthatcorrespondsdirectlytothevalueoftheservicesalreadyprovidedbythecompanyforthesecustomersThusthepracticalexpedientgrantedinIFRS15121(b)isusedandsalesarerecognisedintheamountthattheentitymaychargeThiseliminatestheobligationtodisclosethetotalamountoftransactionpricesthatareallocatedtotheperformanceobligationsforthecontractportfoliothathavenotyetbeenfulfilledasatthebalancesheetdateQuantitativedisclosuresontheperformanceobligationsthathavenotyetbeenfulfilledarenotpossiblewiththecontractarrangementstypicalforassetmanagementduetotherequirementsofIFRS15tolimittherecognitionofvariableconsideration

Disclosuresofcontractswithcustomers

PartofthereceivablesrecognisedinthestatementoffinancialpositionisaccountedforusingtheregulationsofIFRS15

Loans and advances to

banks

EUR thousand


customers

EUR thousand

Other receivables

EUR thousand

Total

EUR thousand

As at 1 Jan 2019 5063 83485 137579 226127

Additions 41840 436126 2251938 2729904

Disposals shy42442 -410157 shy2223020 -2675619

Impairmentreversalofimpairment ndash shy55 ndash shy55

Other 1 6 11 18

As at 31 Dec 2019 4462 109405 166508 280375

As at 1 Jan 2020 4462 109405 166508 280375

Additions 47608 399016 2358694 2805318

Disposals -46252 -430077 -2349187 -2825516


Other 4 1540 952 2496

As at 31 Dec 2020 5822 79866 176967 262655

[67] Disclosure of interests in other entities

Significantjudgementsandassumptions

Control of other companies

Thegroupcontrolsanentitywhenitisexposedtovariablereturnsfromtheentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity

InordertodeterminewhetheranentitymustbeconsolidatedtheUMHGroupchecksaseriesoffactorssuchasbull thepurposeandformoftheentitybull the relevant activities and how these are determinedbull whetherthegrouprsquosrightsresultintheabilitytodirecttherelevantactivitiesbull whetherthegrouphasexposureorrightstovariablereturnsandwhetherthegrouphastheabilitytouseitspowertoaffecttheamountofitsreturns

IfvotingrightsarerelevantthegroupisdeemedtohavecontrolinsofarasitholdsdirectlyorindirectlymorethanhalfofthevotingrightsoveranentityunlessthereisevidencethatanotherinvestorhasthepracticalabilitytounilaterallydirecttherelevantactivitiesPotentialvotingrightsthataredeemedtobesubstantivearealsoconsideredwhenassessingcontrolLikewisetheUMHGroupalsoassessesexistenceofcontrolwhereitdoesnotcontrolthemajorityofthevotingrightsbuthasthepracticalabilitytounilaterallydirecttherelevantactivitiesThiscanariseincircumstanceswherethesizeanddistributionofshareholdersrsquovotingrightsgivethegroupthepowertodirecttherelevantactivities

ThegroupreassessestheconsolidationstatusatleastattheendofeachquarterThereforeanychangesinthestructureleadingtoachangeinoneormoreofthecontrolfactorsrequirereassessshymentwhentheyoccurThisincludeschangesindecision-makingrightschangesincontractualarrangementschangesinthefinancingownershiporcapitalstructureandchangesfollowingatriggereventwhichwasanticipatedintheoriginaldocumentation

99


InrelationtothefundsmanagedbytheassetmanagementcompaniesofthegroupafterassessingtheirroleinlinewiththenationalprovisionsofinvestmentlawtheUMHGroupassumesthatbull ithaspowerofcontrolwithinthemeaningofIFRS107(a)bull ithasexposureandrightstovariablereturnsfromitsinvolvementintheseentities(IFRS107(b))and

bull ithastheabilitytouseitspowerovertheseentitiestoinfluencetheamountofitsreturns(IFRS107(c))

AgainstthisbackdropitreviewsforwhichofthesefundstheUMHGrouphastheroleoftheprincipalwhichwouldnecessitateconsolidationandforwhichitonlyactsasanagentforthird-partyinvestors

AssuchtheUMHGroupalwaysplaystheroleofanagentforthesefundsifbull the contractually agreed remuneration is commensurate with the services provided and includesonlytermscustomarilypresentinarrangementsnegotiatedonanarmrsquoslengthbasis(IFRS10B69)and

bull thescopeoftheUMHGrouprsquosparticipationinsuchafundandtheassociatedvariabilitytakingintoaccountitsdirectparticipationinthisfundandthematerialremunerationcomponentsoftheUMHGroupforthemanagementofthefunddonotexceedaninternallydeterminedthresholdIfthisthresholdisexceededtheoverallcircumstancesareanalysedonacase-by-casebasis

DuetotheprecedencetakenbyinvestorprotectionregulationstheUMHGroupassumesthataslongasthecontrolthresholdinaccordancewithIFRS10isnotexceededitdoesnothavesignificantinfluencewithinthemeaningofIAS28overinvestmentfundsmanagedbythegrouprsquosassetmanagementcompaniesOwn-accountinvestmentsininvestmentfundsnotfullyconsolidatedarethereforenotrecognisedaccordingtotheequitymethodbutatfairvalue

Associates joint control and significant influence

AssociatesareentitiesoverwhichtheUMHGroupdirectlyorindirectlyhassignificantinfluenceSignificantinfluenceisgenerallypresumedwhenthegroupholdsbetween2and5ofthevotingrights

TheUMHGroupholds4ofthevotingrightsofBEAUnionInvestmentManagementLimitedHongKong(BU)AsthisequityinvestmentiscontrolledjointlywithotherpartnersdecisionsontherelevantactivitiesrequiretheunanimousapprovalofallpartiesandtheUMHGrouphasrightstotheequityinvestmentrsquosnetassetsithasbeenclassifiedasajointventureTheequityinvestshymenthasbeenincludedintheUMHconsolidatedfinancialstatementsusingtheequitymethodsinceitsacquisition

Investmentsinsubsidiaries

Deviating reporting periods

InthefinancialyearasinthepreviousyeartherewerenocompaniesintheUMHGroupwithareportingperioddeviatingfromthatoftheUMHGroup

Non-controlling interests in the activities of the UMH Group and its cash flows

Therearesignificantnon-controllinginterestsintheUMHGroupforthesubsidiariesUnionInvestmentRealEstateGmbHHamburg(UIR)ZBIPartnerschafts-HoldingGmbHErlangen(ZBIPH)UnionInvestmentInstitutionalPropertyGmbHHamburg(UII)QuoniamAssetManagementGmbHFrankfurtamMain(QAM)andUnionInvestmentRealEstateAustriaAGVienna(URA)

Non-controlling interests (incl profit share) 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

UnionInvestmentRealEstateGmbH 20181 18287 1894

ZBIPartnerschafts-HoldingGmbH 5013 ndash 5013

UnionInvestmentInstitutionalPropertyGmbH 3009 2316 693

QuoniamAssetManagementGmbH 2041 2567 -526

Union Investment Real Estate Austria AG 642 602 40

Miscellaneous 371 7 364

Total 31257 23779 7478

Non-controlling interests in consolidated net income

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ZBIPartnerschafts-HoldingGmbH -375 ndash -375





Total 9439 8182 1257

100


UnionInvestmentRealEstateGmbHHamburg

UIRisaleadingpropertymanagerinEuropeIthasmorethan50yearsrsquoexpertiseinassetmanageshymentforpropertiesandprovidesbespokerealestatesolutionsforprivateandinstitutionalassetallocationWithitsinternationallydiversifiedpropertyportfolionowdistributedacross20nationalmarketsitleveragestheopportunitiesofglobalmarketcyclesforinvestorsExtensivemarketknowledgeandaninvestmentstrategybasedonthepresenceofitsownteamsandstrongcooperationpartnersintargetmarketscontributetoahighreturnoninvestmentUIRoperatesoncommercialpropertymarketsasaninvestorandsellerbuilderanddeveloperlessorandserviceproviderforallaspectsofrealestateUIRcurrentlymanagespropertyfundswithnetassetsofEUR358billion(previousyearEUR341billion)UMHAGdirectlyholds900ofshares inUIR(previousyear900)ItsshareinthevotingrightsisequaltoitsshareholdingTherearenon-controllinginterestsof55(previousyear55)(UIRBeteiligungsHoldingGmbHampCoKG)andof45(previousyear45)(DZBANK)

UMHAGconcludedanindefinitecontrolagreementwithUIRinJanuary2014whichcanbecancelledwithnoticeofsixmonthstotheendofafinancialyearForthedurationoftheagreeshymentthisguaranteesthenon-controllinginterestUIRBeteiligungsGmbHampCoKGashareofprofits(cashdividend)foreachfullfinancialyearofEUR1961thousandfor55ofsharesinthecompanyandforDZBANKEUR1605thousandfor45ofsharesThenon-controllinginterestsdidnotclaimtheguaranteeddividendwhichdoesnotaffecttheentitlementtothedistributeddividendaccordingtoUIRrsquosresolutionontheappropriationofprofitInthefinancialyearthenon-controllinginterestsinUIRreceiveddividenddistributions(cashdividends)ofEUR4889thousand(previousyearEUR4111thousand)

SummarisedfinancialinformationonUIR

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 404645 352739 51906

Liabilities 202837 169876 32961

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Interest and commission income 446863 393101 53762

Net income through profit or loss 69589 58861 10728

Other comprehensive income -1755 -2332 577

Total comprehensive income 67834 56529 11305

Cash flow 1 -4 5

101


ZBIPartnerschafts-HoldingGmbHErlangen

ZBIPHwhichisbasedinErlangenwasfoundedin2017aspartofastrategicpartnershipbetweentheZBIGroupandUnionInvestmentUMHacquiredadditionalsharesinZBIPHinthecurrentfinancialyearandhassincebeenincontrolofthecompany

TheZBIGroupisoneoftheleadingspecialistsforinvestmentsinGermanresidentialpropertiesTheissuerhassuccessfullydesignedresidentialpropertyfundsforprivateandinstitutionalinvestorssince2002andwith19fundsissuedtodatehasaconsistentlypositivetrackrecord

UMHAGdirectlyholds949ofsharesinZBIPH(previousyear499)ItsshareinthevotingrightsisequaltoitsshareholdingThenon-controllinginterestsof51(previousyear501)areattributable toCICentralImmobilienHoldingAGErlangen

OnthebasisofashareholderagreementandpossiblydeviatingfromthedistributionproportionatetothecapitalshareCICentralImmobilienHoldingAGisowedanannualguaranteedividendofatleastEUR300thousand

AttheendofthereportingperiodthecompanyhadassetsofEUR127914thousandandliabilitiesofEUR29619thousandInterestandcommissionincomeofEUR86millionwasgeneratedNetincomethroughprofitorlossamountedtoEUR-7345thousandOthercomprehensiveincomecametoEUR0thousandTotalcomprehensiveincomethereforeamountedtoEUR-7345thousandwithcashflowofEUR0thousand

Pleaserefertothesectiononbusinessacquisitions(note[71])

UnionInvestmentInstitutionalPropertyGmbHHamburg

UIIapropertyassetmanagementcompanybasedinHamburgandwithabranchinLondonsystematicallyandsuccessfullyfocusesontheinvestmentrequirementsofinstitutionalinvestors30yearsagoUIIalreadyfocusedontheneedsofinstitutionalinvestorsVehicleexpertisebest-in-classprocessesandapreciseknowledgeofthedifferentrequirementsofinstitutionalinvestorsallowittodelivertailoredrealestatesolutionsforinstitutionalassetallocationInadditiontoinstitutionalmutualfundsandmulti-clientspecialfundsUIIoffersinstitutionalinvestorsindividualsolutionsThefundvehiclescanbeofeitherGermanorLuxembourgprovenanceUIIcurrentlymanagesavolumeofEUR97billioninitsinstitutionalbusiness(previousyearEUR77billion)

UMHAGdirectlyholds900ofsharesinUII(previousyear900)ItsshareinthevotingrightsisequaltoitsshareholdingAt100(previousyear100)thesolenon-controllinginterestisBAGBankaktiengesellschaftHamm

UMHAGconcludedanindefinitecontrolagreementwithUIIinOctober2013whichcanbecancelledwithnoticeofsixmonthstotheendofafinancialyearForthedurationoftheagreeshymentthisguaranteesthenon-controllinginterestashareofprofits(cashdividend)foreachfullfinancialyearof1ofthenotionalvalueofthecompanyofEUR620thousandieEUR74thousandInthefinancialyearthenon-controllinginterestinUIIreceiveddividenddistributions(cashdividends)ofEUR557thousand(previousyearEUR556thousand)

SummarisedfinancialinformationonUII

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 44155 36694 7461

Liabilities 14067 13530 537

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow ndash ndash ndash

102


QuoniamAssetManagementGmbHFrankfurtamMain

QAMisalimitedliabilityassetmanagementcompanybasedinFrankfurtandwithabranchinLondonUsingitsengineering-basedapproachQAMfocusesexclusivelyonthedevelopmentandimplementationofquantitativeportfoliomanagementstrategiesforglobalinstitutionalinvestors

UMHAGdirectlyholds937ofthecapital(previousyear931)andallvotingrightsinQAMNon-controllinginterestsaccountfor63ofcapitalshares(previousyear69)Thesenon-votingsharesareheldbythemanagementofQAM

Inthefinancialyear(cash)dividendsofEUR1459thousand(previousyearEUR2694thousand)werepaidtothenon-controllinginterestsofQAM

SummarisedfinancialinformationonQAM

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 76536 84644 -8108

Liabilities 44218 47621 -3403

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Interest and commission income 65269 75243 -9974

Net income through profit or loss 17256 22433 -5177

Other comprehensive income -913 -497 -416

Total comprehensive income 16343 21936 -5593

Cash flow 0 -5 5

UnionInvestmentRealEstateAustriaAGVienna

URAwhichisbasedinViennaisanassetmanagementcompanyforrealestateinaccordancewiththeAustrianRealEstateInvestmentFundActThecompanywasfoundedin2003andmanagesrealestateinAustriaandGermanyURAcurrentlymanagespropertyfundswithavolumeofEUR11billion(previousyearEUR11billion)

UMHAGindirectlyholds945ofsharesinURA(previousyear945)ItsshareinthevotingrightsisequaltoitsshareholdingAt55(previousyear55)thesolenon-controllinginterestisBAGBankaktiengesellschaftHamm

Inthefinancialyear(cash)dividendsofEUR77thousand(previousyearEUR39thousand)werepaidtothenon-controllinginterestsofURA

SummarisedfinancialinformationonURA

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 17676 17778 -102

Liabilities 6007 6839 -832

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






103


Nature and extent of material restrictions

NationalregulatoryrequirementsandprovisionsofcompanylawrestricttheUMHGrouprsquosabilitytotransferassetstoorfromothercompanieswithinthegroupHowevertheserestrictionscannotbespecificallyassignedtoindividualassetsoritemsofthestatementoffinancialposition

In addition owing to regulatory provisions Union Investment Service Bank AG the asset management companiesandthesecuritiescompaniesoftheUnionInvestmentGrouparesubjecttorestrictionsonlendingtoothergroupcompanies

Nature of risks entailed by interests in consolidated structured entities

ThefundUIVario2isconsolidatedintheUMHconsolidatedfinancialstatementsatanetassetvalueofEUR12105millionasattheendofthereportingperiod(previousyearEUR9517million)Thisisafundoffundsthatwasissuedasavehicletobundlethestrategicown-accountinvestmentpositionsoftheUMHGroupanditsinvestmentuniverseandconcentratesonfundsmanagedbytheUnionInvestmentGroupAllunitcertificatesofthisfundmanagedbyUnionInvestmentLuxembourgSAareownedbycompaniesoftheUMHGroupOnlythecompaniesoftheUMHGroupcanacquiretheseunitcertificatesThemaximumdownsideriskislimitedtotheconsolidatednetassetsofthisstructuredentity

Interests in joint arrangements and associates


In the reporting year there were no companies in the UMH Group with a reporting period deviating fromthatoftheUMHGroupThefullyconsolidatedinvestmentfundUIVario2whichhasafinancialyearending31Mayisincludedwithinterimfinancialstatementsasat31December2020

ThelastavailableannualfinancialstatementswithanyadjustmentsareusedAnyknownmaterialeffectsintheyearunderreviewarecoveredinareconciliationstatement

Type extent and financial impact of interests in joint arrangements

BEAUnionInvestmentManagementLimitedHongKong

BEAUnionInvestmentManagementLimited(BU)isajointventureofUMHAGandTheBankofEastAsiaLimitedHongKong(BEA)Theassetmanagementcompanyprovidesportfoliomanagementservicesformutualfundsandmandatoryprovidentfund(MPF)schemesndashregushylatedpensionproductsndashandassetmanagementandadvisoryservicesforinstitutionalclientsSalesactivitiesrunthroughBEAandincreasinglythirdpartiesandmainlyfocusonHongKongandChinaAttheendof2020thecompanyhadHKD790billioninassetsundermanagement(previousyearHKD707billion)in97products(previousyear93products)

UMHAGrsquosshareholdingattheendofthereportingperiodwas4(previousyear4)Theremaining5ofshares(previousyear5)areheldbyBEAThesharesinBUareaccountedforintheUMHGroupusingtheequitymethodInthefinancialyearBUdistributedadividendofHKD530millionorEUR6313thousandtoUMHAG(previousyearHKD517millionorEUR5893thousand)

SummarisedfinancialinformationonBU

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 66992 75747 -8755

ofwhichcashreserve ndash ndash ndash

Liabilities -9019 -12266 3247

ofwhichfinancialliabilities shy8495 shy8290 shy205

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Administrative expenses depreciation and amortisation

-15928 -14662 -1266

Income taxes -2160 -2428 268

Net income from continuing operations 11978 13424 -1446

Other comprehensive income ndash ndash ndash


104


StatementofreconciliationfromsummarisedfinancialinformationtothecarryingamountofthesharesinBU

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Recognised net assets 57973 63480 -5507

Multiplication by shareholding 28407 31105 -2698

Goodwill 25601 27955 shy2354

Carrying amount from remeasurement in line with the equity method

54008 59060 -5052

Type extent and financial impact of interests in associates

Other associates

ThecarryingamountofassociatesindividuallyinsignificanttotheUMHGroupaccountedforusingtheequitymethodwasEUR77millionasattheendofthereportingperiod(previousyearEUR70million)

Summarisedfinancialinformationonindividuallyinsignificantassociatesaccountedforusingtheequitymethod

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Pro rata net income from continuing operations

3699 2278 1421

Pro rata net income from discontinued operations

ndash ndash ndash

Pro rata other comprehensive income ndash ndash ndash

Pro rata total comprehensive income 3699 2278 1421


InitsdomesticcountryofHongKongthejointventureBUissubjecttoregulatoryminimumcapitalrequirementsandthereforerestrictionsonitsdividendandcapitaldistributions

TheassociateR+VPensionsfondsAktiengesellschaftWiesbadenissubjecttostandardindustryrestrictionsondividendandcapitaldistributionsowingtoinsurancesupervisorylawregulations

Risks associated with interests in joint ventures and associates

Obligationsinrelationtojointventures

ThetwoshareholdersofBUarenotpermittedtoendthejointventurewithoutstatinggroundsAspecialmechanismwouldtakeeffectinthiseventTheterminatingpartnerhastoofferthenon-terminatingpartneritssharesatapricepersharedeterminedbytheterminatingpartneritselfIfthenon-terminatingpartnerrefusesthisoffertheterminatingpartnermustinreturnassumethesharesofthenon-terminatingpartneratthepreviouslydeterminedpricepershareThisarrangementisnotreflectedinthecarryingamountsoftheUMHGroup

TheUMHGrouphadrecognisedprovisionsforcommissionforBUofEUR695thousandasattheendofthereportingperiod(previousyearEUR753thousand)

105


Unrecognised losses

TherearenounrecognisedlossesforthejointventuresandassociatesaccountedforusingtheequitymethodintheUMHconsolidatedfinancialstatements

Interests in unconsolidated structured entities

Nature of interests

InitsbusinessactivitiesinitscapacityasanassetmanagerandaninvestortheUMHGrouphasrelationshipswithvariousentitiessetuptogeneratecommissionorinvestmentincomeSomeoftheseentitieshaveoneormoreofthefollowingcharacteristicsbull Thestructureshavebeensetupsothatanyvotingrightsorsimilarrightsarenotthedominantfactorindecidingwhocontrolstheentity

bull they have restricted activities orbull theyhaveanarrowandwell-definedobjective

SuchentitiesarereferredtoasstructuredentitiesTheyareconsolidatedwhenthesubstanceof therelationshipbetweentheUMHGroupandthestructuredentitiesindicatesthatthestructuredentitiesarecontrolledbytheUMHGroupTheentitiescoveredbythisnotearenotconsolidatedastheUMGGrouphasnocontrolovervotingrightscontractsfinancingagreementsorotherfunds

ThegrouphasinterestsinstructuredentitiesasdefinedbyIFRS12whentheUMHGroupiscontractuallyornon-contractuallyexposedtovariablereturnsontheperformanceoftheseentitiesExamplesincludedebtorequityinvestmentsinvestmentmanagementagreementsliquidityfacilitiesguaranteesandderivativeinstrumentsinwhichtheUMHGroupabsorbsthefinancialrisksfromthestructuredentitiesBycontrastinstrumentsthattransferriskstotheseentitiesdonotgiverisetointerestsinstructuredentitiesonthepartoftheUMHGroup

ThebusinessactivitiesoftheUMHGroupwithunconsolidatedstructuredentitiescanbebrokendownintothefollowingtwotypesbull Businessactivity1Managementofandown-accountinvestmentinfundssetupbycompaniesoftheUnionInvestmentGroup

bull Businessactivity2Managementofportfoliosoffundssetupbythird-partycompanies

Business activity 1 Management of funds and own-account investment in funds set up by companies of the Union Investment Group

TheunconsolidatedstructuredentitiestobetakenintoaccountinreportinginaccordancewithIFRS12areessentiallyfundssetupbycompaniesoftheUnionInvestmentGroupinlinewiththecontractualformmodelwithoutvotingrightsandtoasmallerextentincompanystructureswiththeirownlegalidentityTheassetmanagementcompaniesofthegroupformsuchstructuredentitiesinordertosatisfydifferentcustomerrequirementsinrelationtoinvestmentsinspecificassetclassesorinvestmentstyles

TheUMHGroupgeneratesincomefromongoingmanagementfeesforitsfund-basedinvestmentmanagementservicessupplementedinpartbyperformancefeesInadditiontheUMHGrouprsquosexpensesarereimbursedfromfundspartlyintheformofflat-rateremuneration

TherearenoderivativetransactionsbetweencompaniesoftheUMHGroupandthefundsmanagedbytheUnionInvestmentGroupFundsarenotrefinancedbyloansfromUnionInvestmentGroupcompanies

Own-accountinvestmentsinfundsareclassifiedatfairvaluethroughprofitorlosshencetherecognisedgainsandlossesareincludedinnetincomefrominvestmentsecuritiesandunrecogshynisedgainsandlossesfromtheseitemsareincludedinothernetremeasurementincomeonfinancialinstruments

ThefundsarefinancedbyissuingunitcertificatestoinvestorsFurtherfinancingndashintheformofborrowingndashisonlyusedforopen-endedmutualrealestatefundsspecialpropertyfundsandotherindividualfunds

AkeyfeatureofallthefundsmanagedbytheUnionInvestmentGroupisriskdiversificationaccordingtonationalinvestmentlawprovisions

Afurthercomponentofbusinessactivity1istheguaranteefundssetupbycompaniesoftheUnionInvestmentGroupThesehavemarketvalueguaranteesThismeansthatacertainamountoracertainperformanceisguaranteedfortheseinvestmentsuptoacertainlevelTheamountofthemarketvalueguaranteesandthematuritydatesvaryonthebasisoftheagreementsmadefortheindividualinvestmentfundsAmarketvalueguaranteeistriggeredwhenthemarketvalueoftheunitcertificatesinquestiondonotmeettheguaranteedspecificationsatcertaindatesAsattheendofthereportingperiodtheUMHGroupmanagedguaranteefundswithavolumeofEUR789858thousand(netassetvalue)(previousyearEUR1702590thousand)andaminimumpaymentcommitment(nominalamount)ofEUR756666thousand(previousyearEUR1583750thousand)TheputoptionsembeddedintheguaranteefundsweremeasuredatEUR11774thousandasattheendofthereportingperiod(previousyearEUR10165thousand)andreportedasliabilityderivativesontheequityandliabilitiessideofthestatementoffinancialposition

106


NumberofunitcertificatesandvolumeoffundsmanagedbytheUMHGroupasbusinessactivity1

Volume Number (unit certificates)

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

31 Dec 2020

Number

31 Dec 2019

Number

Mutual funds 198731859 184703333 341 334

ofwhichguaranteefunds

789858 1702590 14 25

Special fund 125070213 116299113 426 418



Total 323802072 301002446 767 752


789858 1702590 14 25

ThefollowingassetsandliabilitiesarerecognisedinthestatementoffinancialpositionoftheUMHGroupinconnectionwiththeinterestsinbusinessactivity1Thereisalsopossibleexposurefromcontingentliabilitiesandfinancialguaranteescreditcommitmentsandothercommitments

2020 financial year Mutual funds Special fund Total

ofwhichguarantee

funds

ofwhichguarantee

funds

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1941168 27 33183 ndash 1974351

Loans and advances to customers 3312 ndash 4664 ndash 7976

Investmentfundunits 1672944 ndash 5950 ndash 1678894

Investmentsinsubsidiaries ndash ndash ndash ndash ndash

Otherreceivables 154397 27 22570 ndash 176967

Assetsheldforsale 39218 ndash ndash ndash 39218

Rightofuseassets 71295 ndash ndash ndash 71295

Liabilities 83687 11788 3 ndash 83690

Liabilityderivatives 11774 11774 ndash ndash 11774

Otherliabilities 128 14 3 ndash 131

Leaseliabilities 71785 ndash ndash ndash 71785

Net reported exposure(assets less liabilities)

1857481 -11761 33180 ndash 1890661

Contingent liabilities ndash ndash ndash ndash ndash

Financial guarantees credit commitments and other commitments

744892 744892 ndash ndash 744892

Financial guarantees ndash ndash ndash ndash ndash

Credit commitments ndash ndash ndash ndash ndash

Other commitments 744892 744892 ndash ndash 744892

Net reported exposure + contingent liabilities + financial guarantees credit commitments and other commitments

2602373 733131 33180 ndash 2635553

Actual maximum exposure 2602373 733131 33180 ndash 2635553

107



ofwhichguarantee

funds

ofwhichguarantee

fund

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1701823 69 31944 ndash 1733767





Assetsheldforsale 37739 ndash 1 ndash 37740




Otherliabilities 56 ndash 5 ndash 61


Net reported exposure (assets less liabilities)

1644906 -10096 31939 ndash 1676845



1573585 1573585 ndash ndash 1573585





3218491 1563489 31939 ndash 3250430


Financial guarantees credit commitments and other commitments are stated at their nominal amountsThistakesintoaccountonlyfinancialguaranteescreditcommitmentsandothercommitshymentsforwhichnoliabilitiesorcontingentliabilitieshavebeenrecognised

TheactualmaximumexposureiscalculatedintheUMHGroupasagrossvaluewithoutoffsettinganycollateralandisequaltotheexposurereportedinthetableaboveforbusinessactivity1

Regardingthedisclosureofthemaximumdownsideriskitshouldbenotedthattheabovetableincludesmarketpriceguaranteesintheamountofthenominalvaluesoftheguaranteecommitshymentsforguaranteefunds(EUR756666thousandpreviousyearEUR1583750thousand)lesstheliabilityamountsrecognisedfortheputoptionsembeddedintheseproducts(EUR11774thousandpreviousyearEUR10165thousand)Howeverthemaximumlossexposureforthemarketpriceguaranteesonguaranteefundsisnottheeconomicriskofthisproductclassasthisalsotakesintoaccountthenetassetsoftheseguaranteefunds(EUR789858thousandpreviousyearEUR1702590thousand)asattheendofthereportingperiodandthemanagementmodelforsecuringminimumpaymentcommitmentsfortheseproducts

InthereportingyeartheUMHGroupgeneratedthefollowingincomefromthestructuredentitiesforbusinessactivity1

2020 financial year

Front-end fees management

fees and other fee and

commission income

Income from distributions

Realised and unrealised gains and losses on

remeasure-ment through

profit or loss

Total income recognised in profit or loss

Unrealised gains and losses on

remeasure-ment in other

comprehen - sive income

EUR thousand EUR thousand EUR thousand EUR thousand EUR thousand

Mutual funds 2309258 7114 10694 2327066 ndash

ofwhich guarantee funds

6654 ndash ndash 6654 ndash

Special fund 198349 183 -1936 196596 ndash


ndash ndash ndash ndash ndash

Total 2507607 7297 8758 2523662 ndash



108


2019 financial year



commission income




profit or loss




comprehen -sive income








Total 2362690 8180 17345 2388215 ndash



TheUMHGroupincurredlossesofEUR-15199thousandfrombusinessactivity1inthefinancialyear(previousyearEUR-6614thousand)ThesewereincludedsolelyinnetincomeinprofitorlossThedistributionsbythefundsinthefinancialyearweredeductedincalculatingthelossesincurredforeachfund

Business activity 2 Management of portfolios of funds set up by third-party companies

InadditiontomanagingfundssetupbyassetmanagementcompaniesoftheUnionInvestmentGroupthecompaniesoftheUMHGroupmanageportfoliosoffundssetupbythird-partycompaniesTheUMHGroupgeneratesmanagementfeesandinsomecasesadditionalperformancefeesfromthesecontractualrelationshipsTherearenoderivativetransactionsbetweencompaniesoftheUMHGroupandthesethird-partyfundsThird-partyfundsarenotrefinancedbyloansfromUnionInvestmentGroupcompanies

Thevolumesandnumberofmandatesforbusinessactivity2wereasfollowsyear-on-year

Volume Number

31122020

EUR thousand

31122019

EUR thousand

31122020

Number

31122019

Number

Outsourcing mandates 39835585 40256028 211 220

Asattheendofthereportingperiodbusinessactivity2wasreflectedonlyinthestatementoffinancialpositionitemloansandadvancestocustomerswithfeeandcommissionreceivablesofEUR16924thousand(previousyearEUR20963thousand)Therewasnootherexposurefromcontingentliabilitiesfinancialguaranteescreditcommitmentsorothercommitmentsforthisbusinessactivityasattheendofthereportingperiod

Themaximumdownsideriskfromassetsfromunconsolidatedstructuredentitiesforbusinessactivity2isequaltothecurrentcarryingamountsoftheseitemsandisEUR16924thousand(previousyearEUR20963thousand)

InthefinancialyeartheUMHGroupgeneratedonlyfeeandcommissionincomeofEUR78290thousandfrombusinessactivity2(previousyearEUR82750thousand)Nolosseswereincurredonthisbusinessactivityinthefinancialyear

109


Supportarrangementsforunconsolidatedstructuredentities

Nature of support

TheUMHGroupisconsideredafundrsquossponsorifmarketparticipantsassociatethisstructuredentitywiththeUMHGroupTheUMHGroupassumesthistobethecaseifthetermsldquoUnionInvestmentrdquoorldquoUnionrdquoareusedinafundrsquosname

AstheassetmanagementservicesperformedbytheUMHGroupforthefundssetupbythecompaniesoftheUnionInvestmentGroupandthird-partycompaniesgenerallyalreadysatisfythecriteriaforinterestsinstructuredentitiesthesebusinessrelationshipshavealreadybeenincludedinthedisclosuresonrelationshipswithunconsolidatedstructuredentitiesaboveandarenotnecessaryhere

UntilcontroloverZBIPHwasobtainedon29October2020theUMHGroupactedassponsorfortheldquoUniImmoWohnenZBIrdquofundandldquoZBIUnionWohnenPlusrdquofundAtpresenttheUMHGroupdoesnotactassponsorforanyotherfunds

[68] List of shareholdings

TheshareholdingsofUnionAssetManagementHoldingAGwereasfollowsasattheendofthereportingperiod

Consolidatedsubsidiaries

Name registered office Shareholding ndash direct

Shareholding ndash indirect

Asset management companies

UnionInvestmentInstitutionalGmbHFrankfurtamMain1 1000 ndash

UnionInvestmentInstitutionalPropertyGmbHHamburg1 900 ndash

UnionInvestmentLuxembourgSALuxembourg 1000 ndash

UnionInvestmentPrivatfondsGmbHFrankfurtamMain1 1000 ndash

UnionInvestmentRealEstateGmbHHamburg1 900 ndash

UnionInvestmentRealEstateAustriaAGVienna ndash 945

ZBI Fondsmanagement AG Erlangen ndash 949

Financial service institutions

QuoniamAssetManagementGmbHFrankfurtamMain2 937 ndash

UnionInvestmentAustriaGmbHVienna 1000 ndash

VisualVestGmbHFrankfurtamMain1 1000 ndash

Banks

UnionInvestmentServiceBankAGFrankfurtamMain1 1000 ndash

Securities trading companies

attraxSALuxembourg 1000 ndash

UnionInvestmentFinancialServicesSALuxembourg ndash 1000

Finance companies

ZBIPartnerschafts-HoldingGmbHErlangen 949 ndash

Service companies

UIRVerwaltungsgesellschaftmbHHamburg ndash 900

UnionIT-ServicesGmbHFrankfurtamMain1 1000 ndash

UnionService-GesellschaftmbHFrankfurtamMain1 1000 ndash

ZBIImmobilienAGErlangen ndash 949

ZBVVZentralBodenVermietungundVerwaltungGmbHErlangen ndash 949

Other subsidiaries

UnionInvestmentRealEstateDigitalGmbHHamburg 1000 ndash

1 ExercisingSection264(3)oftheGermanCommercialCode(HGB)theshareholdermeetingsofthesesubsidiariesresolvednottodisclosetheirannualfinancialstatementsortheirmanagementreportsforthefinancialyearfrom1Januaryto31December2020inaccordancewith Section 325 HGB

2 Theshareofvotingrightsforthiscompanyis10

110


Consolidatedinvestmentfunds



UIVario2Luxembourg ndash 1000

Jointventuresaccountedforusingtheequitymethod



BEAUnionInvestmentManagementLimitedHongKong 490 ndash

Associatesaccountedforusingtheequitymethod



compertisBeratungsgesellschaftfuumlrbetriebliches VorsorgemanagementmbHWiesbaden

490 ndash

R+VPensionsfondsAktiengesellschaftWiesbaden 251 ndash

Investmentfundsheldforsale



UniMultiAssetChanceINachhaltigFrankfurtamMain ndash 678

UniMultiAssetChanceIINachhaltigFrankfurtamMain ndash 646

UniMultiAssetChanceIIINachhaltigFrankfurtamMain ndash 809

UniMultiAssetExklusivNachhaltigFrankfurtamMain ndash 770

Unconsolidatedsubsidiaries



BGPAssetManagementGmbHiLBerlin ndash 949

HMVGmbHErlangen ndash 949

UIInfrastrukturManagementSARLLuxembourg ndash 1000

UIManagementSarlLuxembourg ndash 1000

UII Issy 3 Moulins SARL Paris ndash 900

UIIPSDKNImmoInvestGPGmbHHamburg ndash 900

UIISCEManagementGPGmbHHamburg ndash 900

UIIVerwaltungsgesellschaftmbHHamburg ndash 900

UIRFRANCE1SarlParis ndash 900


UIWAustriaVerwaltungsGmbHErlangen ndash 949

UNIONINVESTMENTREALESTATEASIAPACIFICPTELTDSingapore ndash 900

Union Investment Real Estate France SAS Paris ndash 900

URAVerwaltungGmbHVienna ndash 945

VRConsultingpartnerGmbHFrankfurtamMain 1000 ndash

ZBIBeteiligungsGmbHErlangen ndash 949

ZBIFondsverwaltungsGmbHErlangen ndash 949

ZBIProjektentwicklungsGmbHErlangen ndash 949

ZBIVertriebskoordinationsGmbHErlangen ndash 949

ZBIWohnenPlusVerwaltungsGmbHErlangen ndash 949

ZBIWohnWertVerwaltungsGmbHErlangen ndash 949

111



TherearecontingentliabilitiesofPLN200thousand(previousyearPLN200thousand)inconnectionwiththedisposalofthecompanyUnionInvestmentTowarzystwoFunduszyInwestycyinychSAWarsawandofEUR44thousand(previousyearEUR47thousand)duetodisputedreceivablesfromtheStateTreasury

[70] Other commitments

TheUnionInvestmentGrouphascapitalpreservationcommitmentsunderSection1(1)no3 oftheGermanPersonalPensionPlanCertificationAct(AltZertG)amountingtoEUR16113312thousand(previousyearEUR15012905thousand)ThesecommitmentsarethetotalamountofthecontributionspaidbyinvestorsintotheindividualvariantsoftheUniProfiRenteandUniProfiRenteSelectproductsofUnionInvestmentPrivatfondsGmbHwhichinaccordancewithstatutoryprovisionsmustbemadeavailableasaminimumamountatthestartofthepay-outphaseplusthepay-outamountsguaranteedbyUnionInvestmentPrivatfondsGmbHforcontractsalreadyintheinvestmentaccountpay-outphase

InconnectionwithactualguaranteefundslaunchedbyfundmanagementcompaniesintheUMHGroupthereareminimumpaymentcommitmentsofEUR756666thousand(previousyear EUR1583750thousand)

ThefairvalueoftheshortfallincoverfortheseguaranteecommitmentsisreportedinthestatementoffinancialpositionunderlsquoLiabilityderivativesrsquo(note[51])

Asattheyear-endtherewereunderwritingobligationsforthree(previousyeartwo)fundstotallingEUR10392thousand(previousyearEUR7600thousand)

[71] Business combinations

InthereportingyeartherewasabusinesscombinationbetweenUMHAGandtheZBIGroupaleadingcompanyintheGermanresidentialpropertymarketBywayofapurchaseagreementwiththepreviousmajorityownerconcludedon24September2020furthershares(4)inZBIPartnerschafts-HoldingGmbHErlangeninadditiontothe499alreadyheldwereacquiredinexchangeforcashasat29October2020(ldquoclosingrdquo)TheacquisitiongaveUMHAGthemajority ofvotingrightsandthereforecontrolovertheZBIGroup949ofthecapitalandvotingrightssharesinthecompanywereheldattheendofthereportingperiod

TheZBIGroupasanissuerhassuccessfullydesignedresidentialpropertyfundsforprivateandinstitutionalinvestorssince2002andwith19fundsissuedtodatehasaconsistentlypositivetrackrecordTheproductportfolioincludesopen-andclosed-endedmutualfundsforprivateinvestorsaswellasopen-endedspecialfundsandindividualfundsforinstitutionalinvestorsAllfundsinvestexclusivelyinGermanresidentialpropertiesAtthesametimetheZBIGroupcoverstheentirevaluechainThebusinesscombinationseestheUMHGroupsuccessfullyentertheresidentialpropertymarket

Thefoundationforthebusinesscombinationwaslaidbackin2017withthestrategicpartnershipand499equityinvestmentAtthistimethepossibilityofalateracquisitionofadditionalsharesandanassociatedtransferofcontroltoUMHAGwasarrangedviatheagreementofcallandputoptionsThebusinesscombinationwasimplementedasat29October2020Thefairvaluesoftheoptionswereincludedintheconsiderationtransferredinthecourseoftheacquisition

From2017theZBIGroupwasincludedintheUMHconsolidatedfinancialstatementsasanassociateusingtheequitymethodAtransitionalconsolidationwasperformedatthedatecontrolwaspassedwhichledtoafairvaluestep-upoftheexistingsharestoEUR982millionthoughprofitorlossTheresultingeffectonnetincomeofEUR485millionwasrecognisedinnetincomefrominvestmentsecurities(note[29])ThecostofEUR1990milliondeterminedforthepurposesofinitialconsolidationcomprisestheremeasuredsharesalreadyheldthecashpurchasepriceofEUR850millionandthecarryingamountoftheoptions

ZBIPartnerschafts-HoldingGmbHandthethreesubsidiariescontrolleddirectlyorindirectlybythecompanyndashZBIFondsmanagementAGZBIImmobilienAGandZBVV-ZentralBodenVermietungundVerwaltungGmbHndashareincludedintheUMHconsolidatedfinancialstatementsbywayoffullconsolidationAspartofinitialconsolidationthecostsoftheequityinvestmentswerenettedwiththeshareintheassetsandliabilitiesoftheconsolidatedcompaniesattributabletoUMHattheacquisitiondateThisnecessitatedapurchasepriceallocationandanassociatedremeasurementofthenetassetswherebyhiddenreservesandtheattributabledeferredtaxesweredisclosed31October2020waschosenasthereferencedateTheexistingcustomerrelationshipstheldquoZBIrdquobrandandthesharesintheunconsolidatedsubsidiarieswereidentifiedasmaterialassetswithhiddenreserves

TheremeasurednetassetsasattheacquisitiondateamountedtoEUR1056millionofwhichEUR1003millionwasattributabletoUMHandEUR53milliontonon-controllinginterestsThevalueofthenon-controllinginterestsequalstheshareintheremeasurednetassets

112


Theremeasurednetassetscomprisethefollowingitems

31 Oct 2020

EUR thousand

Total assets acquired 166217

Cash reserve 9

Loansandadvancestobanks 36546

Loans and advances to customers 2489


Propertyplantandequipmentandintangibleassets 68061

Other assets 27365

Total liabilities assumed 60577

Provisions 2439

Incometaxliabilities 20634

Otherliabilities 18972

Leaseliabilities 18532

Net assets acquired 105640

ThefairvalueoftheacquiredreceivablesisEUR404millionofwhichEUR365millionprimarilycomprisesloansandadvancestobanksTheamountsequaltherespectivegrossreceivablesasnoimpairmentlosseswererecognisedTherewerenouncollectiblereceivablesasattheacquisitiondate

DuetothenettingofthecostoftheequityinvestmentwiththeremeasuredequitythetransactionresultedingoodwillofEUR988millionThegoodwillparticularlyreflectstheexpectedgrowthoftheZBIGroupexpectedsynergiesfromthebusinesscombinationandtheZBIGrouprsquosworkforcewhichisnoteligibleforrecognitionBecausethetransactionwasconductedasasharedealthegoodwillisnottax-deductible

InaccordancewithIAS36thegoodwillistobeallocatedtooneormorecash-generatingunits(CGU)forthepurposesofsubsequentmeasuredandtestedforimpairmentatthislevelonceayearandwhenthereareindicationsofimpairmentBecausethetransactionwasclosedattheendofOctoberveryclosetotheendofthefinancialyearitwasnotpossibletoallocatethegoodwillinthereportingyearIncompliancewithIAS3684theallocationwillbecompletedinthefollowingreportingyearInthiscontextpleasenotethattherewereindicationsofimpairshymentonthegoodwill

ThestatementofcomprehensiveincomeintheUMHconsolidatedfinancialstatementsincludestheincomeandexpensesofthecompaniesconsolidatedforthefirsttimeproratafortheperiodfromtheacquisitiondatetothereportingdateThecompaniesrsquorecognisedcommissionincome

forthetwo-monthconsolidationperiodamountedtoEUR137millionandnetincomethroughprofitorlosscametoEUR-02millionThisnetincomeincludesamortisationoftheintangibleassetsrecognisedaspartofthepurchasepriceallocationofEUR05millionandincomefromthereversalofthedeferredtaxliabilitiesassociatedwiththeseassetsofEUR02million

BecausethebusinesscombinationoccurredverycloseintimetotheendofthereportingperiodandtherearenoIFRSvaluesfortheZBIcompaniesitisnotpossibletodisclosethecommissionincomeandprofitofthecombinedentityasiftheacquisitiondatehadbeenatthebeginningoftheannualreportingperiod

[72] Leases

UMH Group as lessee

AspartofitsbusinessoperationstheUMHGrouphasenteredintoleasesforbuildingsandoperatingandofficeequipment(vehiclesandhardware)Theleasesforbuildingsandoperatingandofficeequipmenthavetermsoftwoto20yearsandtwotosixyearsrespectively

Leaseshavebeenconcludedwithrenewalandterminationoptionsandwithvariableleasepayments

TheUMHGrouphasshort-termleaseswithatermoflessthan12monthsandleasesforlow-valueassetsUMHutilisestheexemptionsprovidedbyIFRS16forshort-termleasesandleasesforlow-valueassets

Thematurityanalysisfortheleaseliabilitiescanbefoundinnote[63]

113


Thefollowingincomeandexpenseswererecordedintheconsolidatedincomestatementinthefinancialyear

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Depreciationofrightofuseassets -28737 shy25294 shy3443

Interestexpensesonleaseliabilities -886 shy994 108

Expensesforshort-termleases -4171 shy4939 768

Expensesforleasesforlow-valueassets -6286 shy5510 -776

Expenses not included in the measurement ofleaseliabilities

-4632 -4360 -272

Incomefromsubleasingrightofuseassets 18 34 -16

Total -44694 -41063 -3631

InthepreviousyeartherewereobligationsofEUR1354thousandfromshort-termleasespostedinaccordancewithIFRS166Theportfoliooftheseleasesisdissimilartotheportfolioofshort-termleasesbasedontheexpensesforshort-termleasespresentedinthetableabove

TotaloutflowsinthefinancialyearcametoEUR43664thousand(previousyearEUR40616thousand)

Thefollowingtableshowsfutureoutflowsthatarenottakenintoaccountwhencalculatingtheleaseliabilities

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Fromvariableleasepayments 43159 16302 26857

From renewal and termination options 318645 295420 23225

From residual value guarantees ndash ndash ndash

Fromleasesthathavealreadybeenconcludedbuthavenotyetcommenced

59744 173220 -113476

Total 421547 484942 -63395

Therearenorestrictionsorcommitmentsinconnectionwithleases

Therewerenosaleandleasebacktransactionsinthefinancialyear

UMH Group as lessor

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Future minimum lease payments under non-cancellable operating leases

23 83 -60

ofwhichuptooneyear 23 48 shy25

ofwhichonetotwoyears ndash 35 shy35

ofwhichtwotothreeyears ndash ndash ndash

ofwhichthreetofouryears ndash ndash ndash

ofwhichfourtofiveyears ndash ndash ndash

ofwhichmorethanfiveyears ndash ndash ndash

Future minimum lease payments are attributable to

23 83 -60

Landandbuildingsleases 23 83 -60

Vehicleleases ndash ndash ndash

IT leases ndash ndash ndash

IncomefromoperatingleasesreportedinthefinancialyearamountedtoEUR18thousand(previousyearEUR34thousand)InadditionEUR8thousand(previousyearEUR8thousand)wasreportedinvariableleasepaymentsnotlinkedtoanindexorinterestrate

RentalincomeresultsfromsubleasingfoodandcateringspaceintheMainTorPortabuildingThisdoesnotinvolveanymaterialrisks

[73] Financial guarantees

FollowingthedisposalofGVAGENO-Vermoumlgens-AnlageGesellschaftmbHFrankfurtamMain(GVA)inthe2011financialyearUMHAGissuedguaranteestoDZBANKandWGZBANKassecurityforloansextendedbythesebankstotwoclosed-endinvestmentfundsmarketedbyGVAFollowingthemergerofDZBANKandWGZBANKon29July2016thefullamountoftheguaranteerelatestoDZBANK

Asat31December2020thenominalamountoftheseguaranteeswasUSD624million(previousyearUSD624million)orEUR508million(previousyearEUR557million)

114


[74] Number of employees

ThefollowingtablegivesabreakdownbycategoryoftheaveragenumberofemployeesinthefinancialyearcalculatedinaccordancewithSection267(5)HGB

2020

Number

2019

Number

Change

Number

Female employees 1525 1392 133

ofwhichfull-timeemployees 889 800 89

ofwhichpart-timeemployees 636 592 44

Male employees 1905 1780 125



Total employees 3430 3172 258

For information only

Female trainees 49 56 -7

Male trainees 90 89 1

Total trainees 139 145 -6

[75] Auditor fees

Thefollowingtableshowsthebreakdownofauditorfeesbytypeofservice

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Auditsoffinancialstatements 752 695 57

Other assurance services 90 113 shy23

Tax consultancy services 422 51 371

Other services 61 1319 shy1258

Total 1325 2178 -853

AuditorfeescompriseexpensesrelatingtotheauditoftheconsolidatedfinancialstatementsandgroupmanagementreportofUMHAGthestatutoryauditoftheannualfinancialstateshymentsandmanagementreportofUMHAGandtheauditoftheseparatefinancialstatementsmanagementreportsandconsolidationpackagesofsubsidiariesincludedintheconsolidatedfinancialstatementsforwhichanauditisrequiredThiscategoryalsoincludesthefeesfortheauditorrsquosreviewofthecondensedinterimconsolidatedfinancialstatementspackagesduringtheyearThefeeschargedforotherassuranceservicesessentiallyincludedfeesfortheauditperformedinaccordancewithSection89oftheGermanSecuritiesTradingAct(WpHG)andotherassuranceandaudit-relatedservicesThefeesforotherservicesmainlyresultedfromtheauditingoffundsTheyear-on-yeardeclineinthefeesreportedhereisduetothechangeofauditorfortheinvestmentfundsthefinancialyearofwhichendsafter31December2020butbeginsbefore31December2020Thereforenomoreadditionsweretobemadetoprovisionsforauditservicesfromourcurrentauditorwithregardtothesefunds

[76] Events after the end of the reporting period

Therewerenoeventsofparticularsignificanceaftertheendofthefinancialyear

115


[77] Related party disclosures

AsattheendofthereportingperiodDZBANKdirectlyheld7232ofthesharecapitalofUMHAG(previousyear7232)InaccordancewithIFRS10UMHAGisthereforecontrolledbyDZBANKandthusDZBANKisarelatedpartyoftheUMHGroupTheothercompaniesincludedintheDZBANKconsolidatedgroupunconsolidatedsubsidiariesassociatesandjointventuresofDZBANKcontinuetoberelatedparties

Thelistofshareholdings(note[68])showstherelatedpartiescontrolledbytheUMHGrouporoverwhichtheUMHGroupcanexerciseasignificantinfluence

IntheUMHGroupthefollowingarerelatedparties(individuals)asdefinedbyIAS249theBoardofManagingDirectorsandtheSupervisoryBoardofDZBANKtheBoardofManagingDirectorsandtheSupervisoryBoardofUMHAGtheheadsofsegmentsdivisionsandfurtherkeymanagementpersonnelintheUMHGroupandtheirrespectiveclosefamilymembers

UMHAGmaintainsextensivebusinessrelationshipswiththeentitiesincludedintheconsolidatedfinancialstatementsaspartofitsnormalbusinessactivitiesThetransactionswithintheserelationshyshipsareconductedonanarmrsquos-lengthbasis

UMHAGandotherentitiesincludedintheconsolidatedfinancialstatementsenterintorelationshyshipswithotherrelatedpartiesintheirnormalbusinessactivitiesSuchbusinessistransactedonanarmrsquos-lengthbasis

Related party disclosures

Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ofwhichDZBANK 467107 489218 shy22111

ofwhichentitiesalsocontrolledbyDZBANK 16360 19143 -2783

ofwhichjointventuresofDZBANK 47 47 ndash


ofwhichentitiesalsocontrolledbyDZBANK 456 411 45

ofwhichunconsolidatedsubsidiaries 99 5 94

ofwhichassociatesofUMHAG ndash 16115 -16115

ofwhichjointventuresofUMHAG 114 110 4

Other assets 13717 13440 277

ofwhichDZBANK ndash 90 shy90



ofwhichpensionplansforemployees 12284 11011 1273

Right of use assets 580 76 504


ofwhichunconsolidatedsubsidiaries 523 ndash 523

116



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ofwhichDZBANK 5 ndash 5

ofwhichentitiesalsocontrolledbyDZBANK 41 44 shy3

Liabilities to customers 23 26 -3


ofwhichassociatesofUMHAG 3 2 1

Other liabilities 147359 131485 15874

ofwhichDZBANK 90996 87754 3242


ofwhichjointventuresofDZBANK 1716 2042 -326


ofwhichassociatesofUMHAG 235 248 shy13

ofwhichjointventuresofUMHAG 695 753 shy58

ofwhichpensionplansforemployees 19 ndash 19





EUR thousand

2019

EUR thousand

Change

EUR thousand

Interest income and current -1392 -933 -459

ofwhichDZBANK shy1198 shy808 shy390

ofwhichentitiesalsocontrolledbyDZBANK shy194 shy125 -69


ofwhichDZBANK shy1 shy993 992

ofwhichentitiesalsocontrolledbyDZBANK -75 shy51 shy24


Fee and commission income -79506 -53171 -26335

ofwhichDZBANK -72516 -70525 shy1991

ofwhichentitiesalsocontrolledbyDZBANK -6775 -7727 952

ofwhichjointventuresofDZBANK -762 -876 114

ofwhichunconsolidatedsubsidiaries 86 shy42 128

ofwhichassociatesofUMHAG ndash 25591 shy25591


Fee and commission expenses -91866 -95255 3389

ofwhichDZBANK -47491 shy48295 804

ofwhichentitiesalsocontrolledbyDZBANK shy40854 shy43194 2340

ofwhichassociatesofUMHAG shy995 shy951 shy44

ofwhichjointventuresofUMHAG -2526 shy2815 289

Administrative expenses -6158 -7633 1475


ofwhichentitiesalsocontrolledbyDZBANK shy2419 -2616 197

ofwhichjointventuresofDZBANK shy58 shy119 61

ofwhichunconsolidatedsubsidiaries shy1251 shy1419 168

ofwhichassociatesofUMHAG shy109 shy135 26

ofwhichjointventuresofUMHAG ndash shy10 10

117



EUR thousand

2019

EUR thousand

Change

EUR thousand




ofwhichjointventuresofDZBANK 12 -47 59




EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Pleaseseetheinformationinnote[73]regardingfinancialguarantees

ThefairvalueoftheplanassetsmanagedbytheassociateR+VPensionsfondsAktiengesellschaftWiesbadenwasEUR24493thousandasattheendofthereportingperiod(previousyearEUR24507thousand)FundingofEUR286thousandwasprovidedinthefinancialyear(previousyearEUR261thousand)

TheldquoOtherassetsrdquoitemincludespensionplansforthebenefitofemployeeswithavalueofEUR12280thousand(previousyearEUR11011thousand)ThisincludesthefairvalueofreimbursementclaimsagainstR+VLebensversicherungAGWiesbadenacompanyalsocontrolledbyDZBANKamountingtoEUR9075thousand(previousyearEUR7730thousand)FundingofEUR1488thousandwasprovidedinthefinancialyear(previousyearEUR1047thousand)

Remuneration paid to related parties

TheUMHGrouprsquoskeymanagementpersonnelaredeemedtocomprisetheBoardofManagingDirectorsandtheSupervisoryBoardofUMHAGtheheadsofsegmentsdivisionsandotherstaffinkeypositionsinthegroup

InaccordancewithIAS19151disclosuresarealsomadewithregardtothepost-employmentbenefitspaidtothesepersons

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Shortshyterm remuneration 11774 9927 1847

Longshyterm remuneration 3085 2379 706

Contributionstodefined contributionplans

45 45 ndash

Currentservicecostfor definedbenefitplans

2579 2242 337

Total 17483 14593 2890

TheremunerationpaidtothemembersoftheSupervisoryBoardofUMHAGfortheperformance oftheirdutiesamountedtoEUR377thousandinthefinancialyear(previousyearEUR374thousand)TheremunerationpaidtothemembersoftheBoardofManagingDirectorsofUMHAGinthefinancialyearamountedtoEUR5467thousand(previousyearEUR3791thousand)

[78] Board of Managing Directors of Union Asset Management Holding AG

Name Professional capacity

Hans Joachim Reinke ChiefExecutiveOfficer

AlexanderLichtenberg MemberoftheBoardofManagingDirectors

Alexander Schindler MemberoftheBoardofManagingDirectors

JensWilhelm MemberoftheBoardofManagingDirectors

118


[79] Supervisory Board of Union Asset Management Holding AG

Name and title Professional capacity

DrCorneliusRieseChiefExecutiveOfficer1

Co-ChiefExecutiveOfficerDZBANKAGDeutscheZentral-Genossenschaftsbank FrankfurtamMain

Rainer SchaidnagelDeputy Chairman 1

ChiefExecutiveOfficerRaiffeisenbankKempten-OberallgaumlueGKempten

Thorsten BartschEmployee representative

Group manager editorial and training managementUnionInvestmentPrivatfondsGmbHFrankfurtamMain

UlrikeBrouziMember1

MemberoftheBoardofManagingDirectorsDZBANKAGDeutscheZentral-Genossenschaftsbank FrankfurtamMain

DrMatthiasHildnerMember

ChiefExecutiveOfficerWiesbadenerVolksbankeGWiesbaden

MarijaKolakMember

PresidentBundesverbandderDeutschenVolksbanken undRaiffeisenbankeneV(BVR)Berlin

David MillekerEmployee representative 1

WorksCouncilUnionAssetManagementHoldingAGFrankfurtamMain

ProfDrWolfgangMuumlllerMember

ChiefExecutiveOfficerBBBankeGKarlsruhe

WolfgangNettEmployee representative

Sales directorUnionInvestmentPrivatfondsGmbHFrankfurtamMain

JoumlrnNordenholzMember

ChiefExecutiveOfficerVolksbankeGSulingen

Heike OrthEmployee representative

SeniorManagerSalesSupport(since1September2020)UnionInvestmentInstitutionalGmbHFrankfurtamMain

DrNorbertRollingerMember

ChiefExecutiveOfficerR+VVersicherungAGWiesbaden

StefanSchindlerMember

ChiefExecutiveOfficerSparda-BankNuumlrnbergeGNuremberg

Andreas TheisMember

MemberoftheBoardofManagingDirectorsVolksbankEifeleGBitburg

ClaudiaVivesCarrascoEmployee representative

Real estate managerUnionInvestmentRealEstateGmbHHamburg

1 AlsoamemberoftheExecutiveCommitteeoftheSupervisoryBoard

[80] Supervisory mandates held by members of the Board of Managing Directors and employees

Asat31December2020membersoftheBoardofManagingDirectorsandemployeesalsoheldmandatesonthestatutorysupervisorybodiesofmajorcorporationsCompaniesincludedintheconsolidatedfinancialstatementsareindicatedwithanasterisk()

MandatesheldbymembersoftheBoardofManagingDirectorsofUnionAssetManagementHoldingAG

Name Position(s)

Hans Joachim Reinke UnionInvestmentInstitutionalGmbHFrankfurtamMain()DeputyChairmanoftheSupervisoryBoard

UnionInvestmentLuxembourgSALuxembourg()ChairmanoftheBoardofDirectors(until29February2020)

UnionInvestmentPrivatfondsGmbHFrankfurtamMain()ChairmanoftheSupervisoryBoard

UnionInvestmentRealEstateGmbHHamburg()DeputyChairmanoftheSupervisoryBoard

UnionInvestmentServiceBankAGFrankfurtamMain()ChairmanoftheSupervisoryBoard(until11February2020)

AlexanderLichtenberg UnionInvestmentServiceBankAGFrankfurtamMain()ChairmanoftheSupervisoryBoard(since12February2020)

Alexander Schindler UnionInvestmentInstitutionalGmbHFrankfurtamMain()ChairmanoftheSupervisoryBoard

UnionInvestmentInstitutionalPropertyGmbHHamburg()DeputyChairmanoftheSupervisoryBoard(since2April2020)MemberoftheSupervisoryBoard(since1January2020)

QuoniamAssetManagementGmbHFrankfurtamMain()ChairmanoftheSupervisoryBoard

JensWilhelm UnionInvestmentInstitutionalPropertyGmbHHamburg()ChairmanoftheSupervisoryBoard

UnionInvestmentPrivatfondsGmbHFrankfurtamMain()DeputyChairmanoftheSupervisoryBoard

UnionInvestmentRealEstateGmbHHamburg()ChairmanoftheSupervisoryBoard

UnionInvestmentServiceBankAGFrankfurtamMain()DeputyChairmanoftheSupervisoryBoard

119


MandatesheldbyemployeesofUnionAssetManagementHoldingAG

Name Position(s)

SonjaAlbers UnionInvestmentServiceBankAGFrankfurtamMain()MemberoftheSupervisoryBoard

DrCarstenFischer UnionInvestmentLuxembourgSALuxembourg()MemberoftheSupervisoryBoard(since1April2020)

DrGunterHaueisen UnionInvestmentLuxembourgSALuxembourg()ChairmanoftheSupervisoryBoard(since1April2020)

Mandatesheldbymembersofmanagementboardsseniormanagementandemployees

Name Position(s)

DrMichaelBuumltterChiefExecutiveOfficer(UnionInvestmentRealEstateGmbHsince1October2020)

ADLERGroupSALuxembourg (formerlyADOPropertiesSALuxembourg)MemberoftheBoardofDirectors

DrJoachimvonCornbergMemberoftheBoardof Managing Directors (UnionInvestmentLuxembourgSAfrom1March2020to30June2020)

Executivememberofthe BoardofDirectors (UnionInvestmentLuxembourgSAuntil29February2020)

UnionFinancialServicesSALuxembourg()DeputyChairmanoftheBoardofDirectors(until30June2020)

DrFrankEngelsMemberofmanagement(UnionInvestmentPrivatfondsGmbH)

UnionInvestmentLuxembourgSALuxembourg()MemberoftheBoardofDirectors(until29February2020)

Giovanni GayMemberofmanagement(UnionInvestmentPrivatfondsGmbH)

attraxSALuxembourg()ChairmanoftheBoardofDirectors

UnionInvestmentLuxembourgSALuxembourg()MemberoftheSupervisoryBoard (from1March2020to31March2020)DeputyChairmanoftheBoardofDirectors(until29February2020)

Andreacute HaagmannMemberofmanagement(UnionInvestmentInstitutionalGmbH)

UnionInvestmentLuxembourgSALuxembourg()MemberoftheSupervisoryBoard (from1March2020to31March2020)MemberoftheBoardofDirectors(until29February2020)

QuoniamAssetManagementGmbHFrankfurtamMain()DeputyChairmanoftheSupervisoryBoard

RainerKobuschMemberoftheBoardof Managing Directors(UnionInvestmentServiceBankAG)

attraxSALuxembourg()DeputyChairmanoftheBoardofDirectors

UnionFinancialServicesSALuxembourg()ChairmanoftheBoardofDirectors

JoumlrgKotzenbauerChiefExecutiveOfficer(ZBIPartnerschafts-HoldingGmbH)

ZBIFondsmanagementAGErlangen()ChairmanoftheSupervisoryBoard

IreneLehrbach-AppenheimerMemberofmanagement(UnionIT-ServicesGmbH FrankfurtamMain)

UnionFinancialServicesSALuxembourg()MemberoftheBoardofDirectors(since1July2020)

KlausRiesterMemberofmanagement(UnionInvestmentPrivatfondsGmbH)

attraxSALuxembourg()MemberoftheBoardofDirectors

JoumlrnStobbeMemberofmanagement(UnionInvestmentInstitutional PropertyGmbH)

Memberofmanagement(UnionInvestmentRealEstateGmbHsince1October2020)

ChiefExecutiveOfficer(UnionInvestmentRealEstateGmbHfrom1January2020to 30September2020)

1FCKoumllnGmbHampCoKGaACologneChairmanoftheSupervisoryBoard

ADLERGroupSALuxembourg (formerlyADOPropertiesSALuxembourg)MemberoftheBoardofDirectors(until30September2020)

DrBerndItalMemberofmanagement(ZBIPartnerschafts-HoldingGmbH)

ZBIFondsmanagementAGErlangen()MemberoftheSupervisoryBoard

120


[81] Miscellaneous other disclosures

The Board of Managing Directors signed these consolidated financial statements on 10 March 2021 and approved them for submission to the Supervisory Board It is the responsibility of the Supervisory Board to review the consolidated financial statements and then to declare whether the consolidated financial statements are approved




Alexander Schindler Jens WilhelmMember of the Board of Member of the Board of Managing Directors Managing Directors

121


Audit opinions WehaveauditedtheconsolidatedfinancialstatementsofUnionAssetManagementHolding AGFrankfurtamMainanditssubsidiaries(thegroup)comprisingtheconsolidatedincomestatementforthefinancialyearfrom1January2020to31December2020thestatementofcomprehensiveincomeforthefinancialyearfrom1January2020to31December2020theconsolidatedstatementoffinancialpositionasat31December2020thestatementofchanges inequityandthestatementofcashflowsforthefinancialyearfrom1January2020to31December2020andthenotesincludingasummaryofsignificantaccountingpoliciesInadditionweauditedUnionAssetManagementHoldingAGrsquosgroupmanagementreportfor thefinancialyearfrom1January2020to31December2020Inlinewiththerequirements ofGermanlawwedidnotauditthecontentofthecorporategovernancedeclarationaccording toSection289f(4)oftheGermanCommercialCode(HGB)(disclosuresontheproportionofwomen)includedinsectionCofthemanagementreportorofthenon-financialstatementincludedinsectionEofthemanagementreport

Inouropinionbasedonthefindingsofouraudit

bull theattachedconsolidatedfinancialstatementscomplyinallmaterialrespectswithIFRSs asadoptedbytheEUandtheadditionalrequirementsofGermanlawpursuanttoSection 315e(1)HGBandinaccordancewiththeserequirementsgiveatrueandfairviewof thegrouprsquosnetassetsandfinancialpositionasat31December2020andofitsresultsofoperationsforthefinancialyearfrom1January2020to31December2020and

bull theattachedgroupmanagementreportasawholepresentsanaccurateviewofthegrouprsquospositionThegroupmanagementreportisconsistentwiththeconsolidatedfinancialstateshymentscomplieswithGermanlegalregulationsandsuitablypresentstheopportunitiesandrisksoffuturedevelopmentOurauditopinionregardingthemanagementreportdoesnotextendtothecontentsofthecorporategovernancedeclarationinsectionCofthemanageshymentreportortothenon-financialstatementinsectionEofthemanagementreport

PursuanttoSection322(3)Sentence1HGBwestatethatouraudithasnotledtoany reservationswithregardtothecomplianceoftheconsolidatedfinancialstatementsorthe groupmanagementreport

Basis for the audit opinions WeconductedourauditoftheconsolidatedfinancialstatementsandthegroupmanagementreportinaccordancewithSection317HGBandtheGermangenerallyacceptedstandardsfor theauditoffinancialstatementspromulgatedbytheInstituteofPublicAuditorsinGermany(IDW)OurresponsibilityaccordingtotheseregulationsandstandardsisdescribedinfurtherdetailintheldquoResponsibilityoftheauditorfortheauditoftheconsolidatedfinancialstate-mentsandthegroupmanagementreportrdquosectionofourauditorrsquosreportWeareindependent oftheconsolidatedcompaniesincompliancewiththeprovisionsofGermancommerciallaw andprofessionallawandhavefulfilledourotherGermanprofessionalobligationsincompli-ancewiththeserequirementsWebelievethattheauditevidencewehaveobtainedissufficient andappropriatetoprovideabasisforourauditopinionsregardingtheconsolidatedfinancialstatementsandthegroupmanagementreport

Other informationThelegalrepresentativesareresponsiblefortheotherinformationOtherinformationincludesthecontentofthecorporategovernancedeclarationaccordingtoSection289f(4)oftheGermanCommercialCode(HGB)relatingtotheproportionofwomeninsectionCofthemanagementreportandthenon-financialstatementincludedinsectionEofthemanagementreport

Ourauditopinionsregardingtheconsolidatedfinancialstatementsandthegroupmanage-mentreportdonotextendtotheotherinformationandaccordinglyweprovideneitheran auditopinionnoranyotherformofauditconclusioninthisregard

Aspartofourauditwehavearesponsibilitytoreadtheotherinformationandtoevaluatewhether it

bull exhibitsmaterialdiscrepancieswiththeconsolidatedfinancialstatementsthegroup managementreportortheknowledgewehaveobtainedduringourauditor

bull otherwiseseemssignificantlyincorrect

Ifonthebasisofourworkweconcludethatthisotherinformationissignificantlyincorrect weareobligedtoreportthisfactWehavenothingtoreportinthisregard

Independent auditorrsquos report

To Union Asset Management Holding AG

122


Responsibility of the legal representatives and the Supervisory Board for the consolidated financial statements and the group management reportThelegalrepresentativesareresponsibleforpreparingtheconsolidatedfinancialstatementswhichinallmaterialrespectscomplywithIFRSsasadoptedbytheEUandtheadditionalrequirementsofGermanlawpursuanttoSection315e(1)HGBandfortheconsolidated financialstatementsgivingatrueandfairviewofthenetassetsfinancialpositionandresults ofoperationsofthegroupinaccordancewiththeserequirementsFurthermorethelegalrepresentativesareresponsiblefortheinternalcontrolsthattheydeemednecessarytoenable thepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatementwhetherduetofraudorerror

Whenpreparingtheconsolidatedfinancialstatementsthelegalrepresentativesareresponsi- bleforassessingthegrouprsquosstatusasagoingconcernInadditiontheyhavearesponsibility todisclosemattersrelatedtothestatusasagoingconcernifrelevantTheyarealsoresponsi- bleforaccountingonthebasisofthegoingconcernprincipleunlesstheyintendtoliquidate thegroupordiscontinueitsbusinessoperationsorthereisnorealisticalternative

MoreoverthelegalrepresentativesareresponsibleforpreparingthegroupmanagementreportwhichasawholeprovidesanaccurateviewofthegrouprsquospositionandisconsistentwiththeconsolidatedfinancialstatementsinallmaterialrespectscomplieswithGermanlegalregulashytionsandsuitablypresentstheopportunitiesandrisksoffuturedevelopmentThelegalrepreshysentativesarealsoresponsibleforthearrangementsandmeasures(systems)thattheyconsiderednecessarytoenablethepreparationofagroupmanagementreportincompliancewithapplicableGermanlegalregulationsandtoallowsufficientsuitableevidencetobeprovidedforthestatementsinthegroupmanagementreport

TheSupervisoryBoardisresponsibleformonitoringthegrouprsquosaccountingprocessforthepreparationoftheconsolidatedfinancialstatementsandthegroupmanagementreport

Responsibility of the auditor for the audit of the consolidated financial statements and the group management reportOurobjectiveistoobtainreasonableassuranceastowhethertheconsolidatedfinancial statementsasawholearefreefrommaterialmisstatementwhetherduetofraudorerror andwhetherthegroupmanagementreportasawholeprovidesanaccurateviewofthe grouprsquospositionandisinallmaterialrespectsconsistentwiththeconsolidatedfinancial statementsandwiththefindingsoftheauditcomplieswithGermanlegalregulationsandsuitablypresentstheopportunitiesandrisksoffuturedevelopmentandtoissueanauditorrsquosreportcontainingourauditopinionsregardingtheconsolidatedfinancialstatementsandthegroupmanagementreport

Reasonableassuranceisahighlevelofassurancebutnotaguaranteethatanauditcarried outincompliancewithSection317HGBandGermangenerallyacceptedstandardsforthe auditoffinancialstatementspromulgatedbytheIDWwillalwaysuncoveramaterialmisstateshymentMisstatementscanresultfromtransgressionsorinaccuraciesandaredeemedmaterialif itcouldbereasonablyexpectedthattheywouldindividuallyortogetherinfluencethefinancialdecisionsmadebyusersonthebasisoftheconsolidatedfinancialstatementsandgroup managementreport

WeexerciseduediscretionduringtheauditandmaintainacriticalattitudeInaddition

bull weidentifyandevaluatetheriskofmaterialmisstatementswhetherduetofraudorerror intheconsolidatedfinancialstatementsandthegroupmanagementreportplanand implementauditproceduresinresponsetotheserisksandobtainauditevidencethatissufficientandappropriatetoprovideabasisforourauditopinionsTheriskthatmaterialmisstatementsarenotuncoveredishigherinthecaseoftransgressionsthaninthecase ofinaccuraciesastransgressionscanentailfraudulentcollaborationfalsificationsdeliber- ateomissionsmisleadingdepictionsorthesuspensionofinternalcontrols

bull wegainanunderstandingoftheinternalcontrolsystemrelevantfortheauditoftheconsolishydatedfinancialstatementsandofthearrangementsandmeasuresrelevantfortheauditof the group management report in order to plan audit procedures that are appropriate given thecircumstancesbutnotwiththeaimofprovidinganauditopinionregardingtheeffectiveshynessofthesesystems

bull weevaluatetheappropriatenessoftheaccountingpoliciesusedbythelegalrepresentativesandthereasonablenessoftheestimatedvaluespresentedbythelegalrepresentativesand theassociateddisclosures

bull wedrawconclusionsabouttheappropriatenessofthegoingconcernprincipleappliedby thelegalrepresentativesandonthebasisoftheauditevidenceobtainedwhetherthereismaterialuncertaintyregardingeventsorcircumstancesthatcouldcausesignificantdoubt aboutthegrouprsquosabilitytocontinueasagoingconcernIfwecometotheconclusionthat thereismaterialuncertaintyweareobligedtocallattentiontotheassociateddisclosuresin theconsolidatedfinancialstatementsandinthegroupmanagementreportintheauditorrsquosreportorifthesedisclosuresareinappropriatetomodifyourrespectiveauditopinionWe drawourconclusionsonthebasisoftheauditevidenceobtaineduptothedateofour auditorrsquosreportHoweverfutureeventsorcircumstancesmaymeanthatthegroupisno longeragoingconcern

123


bull we evaluate the overall presentation the structure and the content of the consolidated financial statements including the disclosures and whether the consolidated financial statements present the underlying transactions and events such that the consolidated financial statements give a true and fair view of the net assets financial position and results of operations of the group in accordance with IFRSs as adopted by the EU and the additional requirements of German law pursuant to Section 315a (1) HGB

bull we obtain sufficient appropriate audit evidence for the companyrsquos accounting information or business activities within the group in order to provide audit opinions regarding the consolidated financial statements and the group management report We are responsible for directing monitoring and implementing the audit of the consolidated financial state-ments We bear sole responsibility for our audit opinions

bull we evaluate the consistency of the group management report with the consolidated financial statements its legality and the view it gives of the position of the group

bull we conduct audit procedures regarding the forward-looking disclosures made by the legal representatives in the group management report On the basis of sufficient appropriate audit evidence we examine the significant assumptions underlying the legal representativesrsquo forward-looking disclosures in particular and evaluate the appropriateness of the derivation of the forward-looking disclosures from these assumptions We do not provide a separate audit opinion regarding the forward-looking disclosures or the underlying assumptions There is a considerable unavoidable risk that future events will differ significantly from the forward-looking disclosures

Topics for discussion with those responsible for monitoring include the planned scope and scheduling of the audit as well as significant audit findings including any deficiencies in the internal control system that we find during our audit

EschbornFrankfurt am Main 10 March 2021

Ernst amp Young GmbHWirtschaftspruumlfungsgesellschaft

Heist KruskopPublic auditor Public auditor

124


Shareholders and executive bodies of Union Asset Management Holding AG

Shareholders

DZBANKAGDeutscheZentral-GenossenschaftsbankFrankfurtamMain

7232

VRGbRFrankfurtamMain

2425

Localcooperativebanksincludingholdingcompaniesoftheprimarybankstradeassociationsandspecial-purposeentitiesofGermanyrsquosGenossenschaftlicheFinanzshyGruppe and other entities

343

Asat10March2021

Board of Managing Directors of Union Asset Management Holding AG






Supervisory Board of Union Asset Management Holding AG



Co-ChiefExecutiveOfficer DZBANKAGDeutscheZentral-Genossenschaftsbank FrankfurtamMain




Group manager editorial and training management UnionInvestmentPrivatfondsGmbHFrankfurtamMain

UlrikeBrouziMember1




MarijaKolakMember





ChiefExecutiveOfficer BBBankeGKarlsruhe




ChiefExecutiveOfficer VolksbankeGSulingen


Senior Manager Admin Service Institutional Clients (since1September2020)UnionInvestmentInstitutionalGmbHFrankfurtamMain





Andreas TheisMember

MemberoftheBoardofManagingDirectors VolksbankEifeleGBitburg




125


Advisory Board

MatthiasBattefeld ChairmanoftheBoardofManagingDirectors HannoverscheVolksbankeG

RalphBlankenberg ChairmanoftheBoardofManagingDirectors VolksbankUlm-BiberacheG

Frank Bonin MemberoftheBoardofManagingDirectorsVolksbankSuumldheide

GuumlnterBruumlck DeputySpeakeroftheBoardofManagingDirectorsVolksbankAlzey-WormseG

Andreas Fella MemberoftheBoardofManagingDirectorsRaiffeisenbankMain-SpessarteG

BerndFinkbeiner MemberoftheBoardofManagingDirectorsVR-BankEllwangeneG

Gerald Fleischmann ChairmanoftheBoardofManagingDirectors VOLKSBANKWIENAG

JosefFrauenlob ChairmanoftheBoardofManagingDirectors VolksbankRaiffeisenbankOberbayernSuumldosteG

MirkoGruber DeputySpeakeroftheBoardofManagingDirectorsVolksbankRaiffeisenbankRosenheim-ChiemseeeG

Joachim Hausner DeputyChairmanoftheBoardofManagingDirectors VolksbankForchheimeG

PeterHerbst MemberoftheBoardofManagingDirectorsNordthuumlringerVolksbankeG

MarkusHoumlrmann MemberoftheBoardofManagingDirectorsVolksbankTirolAG

ThomasJakoby MemberoftheBoardofManagingDirectorsVVBMuumlnster

Thorsten Jensen MemberoftheBoardofManagingDirectorsVRBankNordeG

JochenKerschbaumer MemberoftheBoardofManagingDirectorsWiesbadenerVolksbankeG

Martin Lieszligem MemberoftheBoardofManagingDirectorsVR-BankBonneG

JoumlrgLindemann MemberoftheBoardofManagingDirectorsVolksbankDarmstadt-SuumldhesseneG

JanMackenberg MemberoftheBoardofManagingDirectorsVolksbankeGOsterholz-Scharmbeck

Sascha Monschauer MemberoftheBoardofManagingDirectorsVolksbankRhein-Ahr-EifeleG

JuumlrgenNeutgens MemberoftheBoardofManagingDirectorsVolksbankKoumllnBonn

Martina Palte MemberoftheBoardofManagingDirectorsBerlinerVolksbankeG

Reiner Richter MemberoftheBoardofManagingDirectorsVolksbankLahreG

Martin Schadewald MemberoftheBoardofManagingDirectorsVolksbankJevereG

RolandSchaumlfer ChairmanoftheBoardofManagingDirectors VolksbankBruchsal-BretteneG

Georg Schneider MemberoftheBoardofManagingDirectorsVR-BankHandels-undGewerbebankeG

DrKlausSchraudner ChairmanoftheBoardofManagingDirectors Pax Bank eG

UweSchulze-Vorwick MemberoftheBoardofManagingDirectorsVolksbankBochumWitteneG

StefanSendlinger MemberoftheBoardofManagingDirectorsVR-BankRottal-InneG

Ulrich Scheppan MemberoftheBoardofManagingDirectorsVBBielefeld-Guumltersloh

ThomasTaubenberger MemberoftheBoardofManagingDirectorsVRBankTuumlbingeneG

Andreacute Thaller ChairmanoftheBoardofManagingDirectors PSDBankNordeG

Roland Trageser DeputyChairmanoftheBoardofManagingDirectors Volks-undRaiffeisenbankMain-Kinzig-BuumldingeneG

WolfgangVoumllkl SpeakeroftheBoardofManagingDirectorsVolksbankRaiffeisenbankRegensburg-SchwandorfeG

MichaelWeidmann DeputyChairmanoftheBoardofManagingDirectors SpardashyBank Hessen eG

LarsWitteck MemberoftheBoardofManagingDirectorsVolksbankMittelhesseneG

Matthias Zander ChairmanoftheBoardofManagingDirectors VolksbankKraichgaueG

Asat10March2021

126

Union Asset Management Holding AG 2020 corporate social responsibility report Key performance indicators

2020 corporate social responsibility report Key performance indicators

Significanceofsustainability 128

AboutUnionInvestment 129

Sustainablecorporatestrategy 131

Sustainablecorporategovernance and communication 133

Productsandservices 137

Employees 160

Environmentalresponsibility 164

Socialresponsibility 168

Supplychainresponsibility 170

Sustainabilityprogramme 171

Aboutthisreport 176

GRIIndex 177

127


Sustainability in the Union Investment Group

The2020annualreportandCSRreportoftheUnionInvestmentGroupprovideanoverviewofthekeyeconomicenvironmentalandsocialdevelopmentsandprogressoftheUnionInvestmentGroupinthe2020financialyear

128


1 Significance of sustainability

Thesignificanceofsustainabilitycontinuedtosteadilyincreasein2020drivenmainlybytheEUActionPlansetoutinmoredetailbytheEuropeanCommissionInterestamongretailclientsalsopickedupconsiderablyndashlongbeforeitbecomescompulsoryforfinancialadvisorstoascertainsustainabilitypreferencesExplicitlysustainableinvestmentproductsaccountedforaround50ofnewbusinessintheretailclientsegmentin2020IntotalAuMinsustainablefundsamountedtoEUR61billionattheendof2020upnearly15onthepreviousyear

InadditiontothisfinancialsignificanceofsustainabilitytheissueisalsooffundamentalimportanceforUnionInvestmentasacompanyoftheGenossenschaftlicheFinanzGruppeOver170yearsagoFriedrichWilhelmRaiffeisencoinedamaximforthecooperativemovement

ldquoPeopleworkingtogethercanachievewhatonepersoncannotmanagealonerdquoThisisparticularlytruewithregardtosustainabilitywhichwecanonlyimprovebyworkingtogetherinordertopreservealiveableenvironmentforfuturegenerationsAccordinglysustainabilityisfirmlyrootedinallmaterialprocessesatUnionInvestmentTheintegrateddevelopmentofallrelevantsustainabilityaspectsthroughoutthecompanyisguaranteedbyanewlyformedsteeringcommittee

ForUnionInvestmentsustainabilitymeansactingresponsiblyandwithaneyeonthelongtermtoconservenaturalresourcesforfuturegenerationsndashasabusinessandaninvestor

129


The company

Withmorethan65yearsofexpertiseintheareaoffundsandassetsundermanagementinexcessofEUR380billiontheUnionInvestmentGroupisoneofthebiggestandmostimportantservice providers withintheGermanassetmanagementsectorAsanactiveassetmanagerUnionInvestmentoffersneeds-basedinvestmentsolutionsndashbothforprivateandinstitutionalinvestors

Onceagainin2020productpolicyintheretailclientsbusinessprimarilyfocusedontheclientsrsquosecurityneedsBusinessdevelopmentcontinuedtofocusoninvestingandoptimisingassetsold-ageprovisionandsavingsServicesintheretailbusinessareexclusivelyavailabletotheretailclientsofthecooperativepartnerbanks(lsquoVerbundfirstrsquo)

TheportfolioofservicesforinstitutionalclientsisdesignedwithdiscerninginstitutionalinvestorsofvaryingsizesinmindTheclientswithintheGenossenschaftlicheFinanzGruppecooperativebankinggroupareprimarybanksandotherspecialistbanksandalsocorporateclientsofthecooperativepartnerbanksUnionInvestmentalsocompetesforinstitutionalinvestorsrsquoinvestmentcapitaloutsideoftheGenossenschaftlicheFinanzGruppeinsideandoutsideGermanyforexamplewithpensionfundsandinsurancecompanies

In addition to its activities in Germany the Union InvestmentGroupoffersselectedfundsinAustriaItalySwitzerlandtheUKtheNetherlandsLuxembourgBelgiumandtheScandinavianmarketsThejointventurebetweenUnionInvestmentandtheBankofEastAsia(BEAUnionInvestmentManagementLtd)lookstoAsiaasafuturemarketThisreportfocusesontheUnionInvestmentGroup

Group companiesequityinvestmentsandtheirprincipalplacesofoperationarelocatedinGermanyLuxembourgAustriaFranceSingaporewithbranchesinLondonNewYorkandMadrid

102-2

102-6

102-6

102-4

Ownership structure and governance of the Union Investment Group

AtthetopoftheUnionInvestmentGroupisUnionAssetManagementHoldingAGanunlistedstockcorporationTheshareholdersarebullDZBank723bullVRGbR243bullLocalcooperativebanksincludingholdingcompanies ofthecooperativebanksandtradeassociationsofthe Germancooperativefinancialservicesnetworkand otherentities34

The ChiefExecutiveOfficerofUnionAssetManagementHoldingAGisHansJoachimReinkeHeisnotsimultaneouslythemanagingdirectorofanoperatingsubsidiaryofUnionAssetManagementHoldingAGTheChairmanoftheSupervisoryBoardofUnionAssetManagementHoldingAGisDrCorneliusRiese(Co-CEOofDZBANKAG)

The SupervisoryBoardofUnionAssetManagementHoldingAGcomprises15memberstenofwhomareshareholderrepresentativesandfiveofwhomareemployeerepresentativesAllthemembersoftheSupervisoryBoardareboundbytherequirementsrightsandobligationsinherenttotheactivitiesofthesupervisoryboardofapubliclimitedcompanyasprescribedinGermanyrsquosStockCorporationAct(AktG)

ThetenureoftheincumbentUMHSupervisoryBoardwhichcurrentlycomprisesfourwomenandelevenmenisscheduledtolastuntiltheAnnualGeneralMeetingofUMHin2022

ThecompanyrsquosArticlesofAssociationrequirethemembersoftheSupervisoryBoardappointshyedbytheAnnualGeneralMeetingtoprotecttheinterestsoftheshareholdersininvestmentfundsissuedbysubsidiariesonthebasisoftheirpersonalityandexpertiseSelectionissubjectto various criteria including expertiseandexperienceintheareaoffinancialcorrelationsInprincipleonlypersonswhoaremembersofthegovernancebodyofacooperativecompanymaybeappointedastheSupervisoryBoardmemberforshareholdersThisprinciplemaybedeviatedfrominthecaseofamaximumoftwoshareholderrepresentativesAsUnionAssetManagementHoldingAGisnotanassetmanagementcompanywithinthemeaningofGermanyrsquosInvestmentCode(KAGB)theindependencerequirementsstipulatedinSection18(3)KAGBdonotapplytothiscompanyInparticularthesupervisoryboardsofthethreegroupcompaniesUnionInvestmentPrivatfondsGmbHUnionInvestmentInstitutionalGmbHandUnionInvestmentRealEstateGmbHwhichdofallwithinthescopeofSection18(3)KAGBeachincludeasupervisoryboardmemberwhoinaccordancewiththelawisindependentoftheshareholdersthecompaniesassociatedwiththemandthecompanyrsquosbusinesspartners

102-23

102-22

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2 About Union Investment

102-5

130


TherearenoobstaclestoanyofthemembersoftheSupervisoryBoardofUnionAssetManagementHoldingAGbeingmembersofsaidboardonthebasisofothermandatesalreadyexercisedpursuanttoSection25cdoftheGermanBankingAct(KWG)

TheSupervisoryBoardofUnionAssetManagementHoldingAGadditionallypassedaresolutionsettingatargetof20fortheproportionofwomenontheUMHSupervisoryBoardtobemetby31December2021(proportionasat31December2020267)TheproportionofwomenontheBoardofManagingDirectorsinthereportingperiodwas0TheSupervisoryBoardhasdeterminednottosetabindinghighertargetuntil31December2021InadditiontheBoardofManagingDirectorshasdefinedtargetsinaccordancewithSection76(4)AktGforthetwomanagementlevelsbelowtheBoardofManagingDirectorsthesetargetsaretobemetby31December2021

ThefiveemployeerepresentativesontheSupervisoryBoardareelectedbytheworkforceThemembersoftheBoardofManagingDirectorsofUnionAssetManagementHoldingAGareappointedbytheSupervisoryBoardofUnionAssetManagementHoldingAGTheSupervisoryBoardbasesitsdecisionsonstringentqualificationandexperiencerequirementsThequalificationandregularityofthegovernanceofUnionAssetManagementHoldingAGarethesubjectofanauditperformedbytheSupervisoryBoardandtheauditors

ThecodeofprocedurefortheSupervisoryBoardofUnionAssetManagementHoldingAGstipulatesthateverymemberoftheSupervisoryBoardmustdiscloseanyconflictsofinterestrelatingtotheirpersontotheSupervisoryBoardwithoutunduedelayAsarulemembersoftheSupervisoryBoardmaynotacceptthird-partybenefitsorallowsuchbenefitstobepledgedto them or to third parties in relation to their exercising their activities nor may they promise or grantunjustifiedbenefitstothirdpartiesThecompanyensuresthatthisruleiscompliedwithbyintroducingandregularlyupdatinginternalguidelinesandcanstipulatecriteriaforexceptionstotherule(deminimiscases)ASupervisoryBoardmemberrsquosconsultancycontractsoranyotherservicecontractsorcontractsforworkwiththecompanyaresubjecttotheapprovaloftheSupervisoryBoard

102-25

131


UnionInvestmenthasasustainabilitystrategywhichwasadoptedbythefullBoardofManagingDirectorsandwhichpositionsusasanambitiouscompanyintheareaofsustainabilityissuesintheyearstocometooonthebasisofthesuccessachievedthusfarThesustainabilitystrategywasputintooperationin2020viatheSustainabilitySteeringCommittee(ldquoSSCrdquothecompany-widesteeringcommitteeforsustainability)TothisendmeasuresweredevelopedintheactionareasofpositioningservicesandexpertisemarketingproductsandoperationstoguaranteethatUnionInvestmentcanliveuptoitsclaimtobeasustainabilityleaderinGermanyThemeasuresdefinedherearesynchronisedwiththesustainabilityprogrammewherethisispossibleandexpedientThankstothesustainabilityprogrammetheindividualorganisationalunitspursuespecificsustainabilitygoalsandagreemeasuresforfurtherdevelopmentonanannualbasisTherelevanceofthisdevelopmentprogrammeisunderscoredbythefactthatitwaspresentedtotheBoardofManagingDirectorsforapprovalandispublishedinthesustainabilityreport

ThemanagementapproachesdescribedareexaminedinternallyatregularintervalsandenhancedasrequiredOperationalgoalsandmeasuresregardingtherespectiveaspectsaresetoutinthesustainabilityprogramme(2020annualreportandCSRreportpages133)Thesustainabilitycodewhichisavailableonline stipulates how Union Investment meets its responsibilitiesinitsbusinessactivitiesandactsinallitsrelationshipswithinvestorsemployeessupplierstheenvironmentandsocietyInlinewiththisUnionInvestmenttakesaprecautionaryapproachwithinthecompanybyactivelymanagingandimprovingitsuseofresourcesInourcorelineofbusinessourmainpriorityistosafeguardourclientsrsquoassetsandsecuretheirpensionandprovisioncommitmentsthroughourservices

Union Investment has a sustainabilitystrategywhichwasadoptedbythefullBoardofManagingDirectorsandwhichpositionsusasanambitiouscompanyintheareaofsustainabilityissuesintheyearstocometooonthebasisofthesuccessachievedthusfarWebaseouractivitiesonnationalorinternationalstandardsandimplementthemwhereverthisappearstobeprudentWerecognisedtheUNPrinciplesforResponsibleInvestment(UNPRI)asakeystandardfortheimplementationofsustainabilityinourcorelineofbusinessbackin2010andhavecontinuedtosystematicallydevelopourservicesinaccordancewithevergreaterrequirementseversinceTheannualUNPRIfeedbackandotherbenchmarkingstandardsgiveusvaluableinsightsintohowweneedtofurtherdevelopourcorebusinessprocessesTheprimaryfocusforthenextfewyearsistoplayanactivepartinshapingtheanticipatedchangeseginthecontextofdiscussionsonthelong-termfocusofthefinancialmarketsandtoimplementthesechangesvigorouslyintheinterestsofthecompanyandourinvestors

Asacustodianforover4millionprivateinvestorsinGerman-speakingcountriesandnumerouslocal and international institutional investors we also actively uphold ownersrsquo interests in terms ofsustainabilitydevelopment

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Sustainability is part of our business model

SustainabilityispartofourbusinessmodelWethereforetakematerialsustainabilityaspectsintoaccountbothinthecorebusinessandatoperatinglevelIndoingsoweaimtointegratethetwoareaswherethisispossibleandexpedient

InthecorebusinessforexamplethesocialchallengeofdemographicchangeiscloselylinkedwithpensionproductsforthebroadpopulationclimatechangeisparticularlyimportantinthedevelopmentandmanagementofourrealestateassetsandalsointheassessmentoflistedcompaniesAndsecuringgoodandresponsiblecorporatemanagementispartofourCSRapproachinportfoliomanagementInthecompanydialoguewhenselectingourinvest- mentpropertiesandwhenbuyinganddevelopingrealestatepropertiesweincorporatesustainabilityaspectsinthedecision-makingprocessesandworktowardsimprovementsregardingenvironmentalandsocialquestionsaswellascorporatemanagementaspectsWedothisbothindividuallyandinthecontextofjointactivitieswithotherinternationalassetmanagerstomakeouractivitiesmoreeffectiveSince2012wehavealsobeenofferingthisformofldquoCSRrdquotoinvestorswhohavenotinvestedinUnionInvestmentproductsinordertoextendthereachofoursustainabilityinitiativesevenfurther

WearealsocontinuouslyexamininghowtoimproveoursustainabilityperformanceatoperatinglevelForexampleUnionInvestmenthasimplementedanenvironmentalmanageshymentsystemcertifiedaccordingtoISO14001Alsoinpurchasingwetakeaccountofsustain-abilityaspectsintheselectionofpurchasedproductsandresourcesaswellasinthesupplierrelationshipandmaketheseasubjectofongoingdiscussioninthedialoguewithsuppliers

102-15

3 Sustainable corporate strategy

132


Sustainability is part of our mission statement

Union Investment developed a new mission statement in 2010 which was realigned to the endof2017ItstatesthatthecompanyrsquosmissionisgearedtowardstheinterestsofourinvestorsandenshrinestransparencypartnershipandprofessionalismaskeyelementsofthecorporateculturealongsideourcooperativeidentitySinceJuly2019thefocusonsustainabilityhasalsobeenenshrinedtherein

Thesustainabilitycodewhichwasadoptedin2015containsacomprehensivedescriptionofourunderstandingofgoodcorporategovernanceandthevariousareasofactivityofsustainabilityArevisionofthecodeisplannedfor2021Thereareseparateguidelines on responsibleinvestmentforourcorebusinessprocessofassetmanagementtheywereupdatedin2020ThesustainabilityrequirementsforsuppliersoftheDZBANKGroupareappliedasguidelinesfordealingwithexternalsuppliersSeparatemanagementguidelinesalsoexistforemployeemanagement

102-16

Our values

Cooperative self-imagemeansthatwebelongtotheGenossenschaftlicheFinanzGruppeandshareitsconvictionsItisourownerandemployeranditgivesusmeaningsowefeelasenseofoblishygationtowardsit

Partnership means working together on an equalfootingwithafocusonresultsSuccessrequiresunderstandingtheotherrsquosviewpoint

Professionalismstandsforsettingthe higheststandardsforourownperformance

Transparency means that our actions are clearandeasilyunderstood

Sustainabilitymeansactingresponsiblyand with an eye on the long term to conserve naturalresourcesforfuturegenerationsndashas abusinessandaninvestor

133


41 Sustainable corporate governance

Sustainability is a matter for the Board of Managing DirectorsTheBoardofManagingDirectorsofUnionAssetManagementHoldingAGistheUnionInvestshymentGrouprsquostopdecision-makingbodyTheSupervisoryBoardofUnionAssetManagementHoldingAGisthehighestsupervisorybodyThegroup-widemanagerialandcoordinationresponsibilitiesarepooledwithinUnionAssetManagementHoldingAGasthecontrollingcompanyoftheUnionInvestmentGroupInadditiontothesecoreresponsibilitiesthiscompanyhandlesgroup-wideservicesItdoesnotengageinanyoperatingactivities

TheBoardofManagingDirectorsofUnionAssetManagementHoldingAGaddressessustain-abilityissuesinitsregularreportingandaspartofitsresponsibilityInthefirstquarterof2020 forexampletheBoardofManagingDirectorsresolvedtoreducethethresholdforinvestmentsincompaniesthatminecoalfrom30to5oftherevenuefromcoalminingInresponse theindependentnon-governmentalorganisationldquoUrgewaldrdquosaidthatUnionInvestmentrsquosapproachtocoalinvestmentswasexemplaryforGermany

Thecompanyrsquoscriticalconcernsareaddressedbymeansoftheregularrisk report and the quarterlyreportingofalltheoperatingsegmentstotheUMHrsquosBoardofManagingDirectorsIfnecessaryespeciallycriticalissuesaresubjecttoseparateauditsanduponbeingauditedareresubmittedtobepassedbyaresolution

The Supervisory Board assesses the performanceoftheBoardofManagingDirectorsonceayearonthebasisofagreedex-anteperformancetargetsSustainabilityissuesareacomponentoftheBoardofManagingDirectorsrsquotargetagreementandperformanceassessmentDecisionsregardingtheformalapprovaloftheactionsoftheSupervisoryBoardandBoardofManagingDirectorsofUnionAssetManagementHoldingAGaremadeannuallybytheshareholdersattheAnnualGeneralMeetingTheUMHSupervisoryBoardreceivesaquarterlysustainabilityreport

TheUIGrsquosbusinessandriskstrategy is presented to the UHMrsquos Supervisory Board once a year forapprovalThewrittenquarterlyreportsubmittedtotheUMHrsquos Supervisory Board likewise alwaysincludesinformationregardingtherisksituationandtheGrouprsquossustainabilityperformanceESGrisksarepartoftheriskmanagementsystemwiththeirownriskindicatorstheriskstrategyandtheriskinventory

102-18

102-31

102-27

102-32

102-33

102-34

102-28

102-30

102-31

Sustainability is firmly embedded in our structuresImprovingeconomicenvironmentalandsocialperformanceisfirmlyembeddedinthecompanyanditsstructuresResponsibilitiesandfunctionsaredelegatedtothelinemanagersonthisbasisCoordinationofthesustainabilitystrategyandmeasuresistheresponsibilityofUMHrsquosSustain-abilityManagementdepartmentSustainabilityManagementcoordinatestheUnionInvestmentGrouprsquossustainabilitystrategyTheheadofSustainabilityManagementreportstotheheadoftheGroupManagementdepartmentThisoptimallysecurestheinterlinkingofthesustainabilityandthecorporatestrategy

AtthebehestoftheUMHBoardofManagingDirectorssustainabilitygovernancepursuescross-companysustainabilitygoalsincludingthesteeringandcommunicationofstrategydevelopmentandtheeffectiveintegrationofcentralmeasuresatmarketorproductlevelwithactivitiesatcompanylevelSustainabilitygovernancecomprisesseveralcommitteesandstakeholderswhocooperatetoworkoncross-companysustainabilityissuesandeffectdecisionsTheaimofthecooperationistoviewandtotreatsustainabilityissuesasanintegratedwholeInordertosupportoperationseffectivelythestandardsexpectedandofferedonthemarketmustalsobeimplementedatcompanylevel

TheSustainabilitySteeringCommittee(SSC)isthecentralcommitteeinthesustainabilitygovernancestructureTheSSCaimstoprocessandcoordinatecross-companysustainabilityissuestotakerelevantdecisionsandtoescalatestrategicissueswhenrequiredTheSSCcollatesthesustainabilityrequirementsandideasofhigherbodies(egBoardofManagingDirectors)fromtheinternalsegmentsandbusinessareasandfromthemarketenvironmentandthenbasesitsdecisionsonqualifiedassessmentandcoordinatedprocessing

The guidingprinciplesstrategicgoalsandguidelinesaredevelopedandsetbytheBoard ofManagingDirectorsofUnionAssetManagementHoldingtogetherwiththemanagersWithregardtothecompanyrsquossustainabilityfocuscontinuationofitsCSRstrategyforthenextfewyearswassecuredbyresolutioninJuly2019

We have defined guiding CSR topicsAsafinancialserviceproviderUnionInvestmentreliesparticularlyonthetrustofitsinvestorsComplyingwithsocialstandardsandmeetingexpectationsofusisanimportantaspectofourbusinessactivitiesandresponsibleactionWehavedefinedldquocorporategovernanceandcommunicationrdquoldquoenvironmentrdquoldquoemployeesrdquoldquosocietyrdquoandldquoproductsandservicesrdquoasguidingCSRtopicsForourCSRactionareasandstakeholdergroupswedevelopguidelinesforresponsibleactionthatwefollow

102-18

102-19

102-20

102-26

4 Sustainable corporate governance and communication

134


ThekeyissuesforUnionInvestmentweredeterminedonthebasisoftheirimpactonUnionInvestmentrsquos current and futurebusinessactivitiesAtthesametimewemustbeinapositiontoinfluencetherespectiveissueeitherdirectlyorindirectlyTheidentifiedkeyissueswereassigned to the correspondingareasofactivity

Union Investmentrsquos areas of activity Identified key issues

Corporategovernancecommunication bullCorporategovernancecommunication

Products and services bullSustainableproductsbull EngagementbullSustainabilityinrealestate

Employees bull Employees

Environment bull Environmental management systembull Climate protectionbullConsumptionofresources

Society bull Advocacy association and committee workbullSupplychainresponsibility

Overallweadheretobest-practicestandards in Germany and regard this process as a continuousimprovementprocessforthecompanyForinstancewerecognisedthePrinciplesforResponsibleInvestmentasakeystandardfortheimplementationofsustainabilityinourcorelineofbusinessbackin2010andhavecontinuedtosystematicallydevelopourserviceseversinceTheguidelinesonresponsibleinvestmentwererevisedin2020andadjustedinlightofthedevelopmentsinrecentyearsIntherealestatebusinessweadditionallycomplywiththeleadingGermanPropertyFederationcodeforsustainablerealestatebusinessandreportaccordinglyinourannualsustainabilityreport(seesection56)Wethereforeensurethatweevolveatthesamepaceastheforeseeableincreaseinrequirements

The sustainability programme manages goals and measuresWiththesustainabilityprogrammeUnionInvestmentmanagesgoalsandmeasuresrelatingtoallaspectsofsustainabilityBoththeprogrammeandthemeasuresarespecifiedforaperiodlastingseveralyearsarereviewedandupdatedeachyearandareadoptedbytheUnionAssetManagementHoldingAGBoardofManagingDirectorsTheperformanceindicatorsaremeasuredonthebasisofrecognisedexternalstandardsAsix-monthlyreviewofthesetgoalsbytheHeadofSustainabilityManagementandcorrespondingreportingtotheBoardofManagingDirectorsofUnionAssetManagementHoldingAGensurearegularplanningandcontrollingprocessDataqualityisensuredbyapplicationofanestablishedelectronicCSRmanagementsystemAttheturnof20192020newmeasureswerenotdefinedintheusualannualcycleThiswasaimedatmorecloselyinterlinkingthederivationofsegment-andarea-specificsustainabilitymeasureswiththedevelopmentofthecompashynyrsquosstrategyingeneralandthesustainabilitystrategyinparticularBotharefinalisedinthesecondquarterofeachyearsothedevelopmentofmeasuresaimedatpromotingthesestrategiescanbebegunthereafterSince2020thesustainabilityprogrammehasbeen

102-46

102-47

103-1

103-2

revisedandupdatedmidwaythroughtheyearwiththechangesbeingreportedintheCSRreportofthefollowingyear

Inthecontextoftheannualcompany-wideplanningprocessallbusinessunitsofthegrouparerequiredtocomeupwiththeenvironmenttrendsanddevelopmentrequirementsfortheirownserviceprovisionThisalsoincludesrelevantESGaspectsfortherespectivebusinessprocessesincludingpotentialsustainabilityrisksThisensuresthattheirownperformancecapabilityandcompetitivenessareanalysedandpotentialforimprovementisidentifiedonaregularbasisforallstagesofthevaluechainInadditionspecificcontinuationoftheCSRstrategyandkeymeasuresforthedefinedactionareasresultsinseparategoalsbeingsetandsubsequentlyintegratedinthebusinessstrategyConsequentlyspecificESGdevelopmentsareinterlinkedwithcorporateplanningatvariouslevels

42 Stakeholder engagement

The stakeholdergroupsrelevanttoUnionInvestmentwereidentifiedbywayofaninternalsurveyusingastructuredquestionnaireThestakeholderssurveyedshoulddemonstrateafundamentalunderstandingofsustainabilityininvestmentInamaterialityanalysisconductedin2017167peoplefromthevariousstakeholdergroupswereaskedaboutrelevantaspectsfromthefiveCSRareasofactivitythatarerelevanttoUnionInvestmentbywayofanonlinesurveyusingastructuredquestionnaireTherelevantareasofactivityforthecompanyarederivedfromthesustainabilitystrategyadoptedbytheBoardofManagingDirectorsandfromsurveysofrelevantstakeholdergroupsForexampletheareasofactivitycitedinsection41wereidentifiedasmaterialldquocorporategovernanceandcommunicationrdquoldquoenvironmentrdquoldquoemployeesrdquoldquosocietyrdquoandldquoproductsandservicesrdquoThematerialityanalysisisscheduledtobeupdatedin2021

Dialogue and engagement with the stakeholdergroupsistarget-group-specificandassumesdifferentformsandintensitiestheUnionInvestmentshareholdersareinvolvedviatheestablishedsupervisorybodiesandforthelocalcooperativebanksthereareannualregionalseriesofeventsinwhichalltheaspectsofpartnershipwithUnionInvestmentarediscussedindetailTheemployeesarekeptinformedaboutthestateofthecompanybymeansofregulareventsandviainternalmediaInterestsandconcernscanalsobesharedThereisongoingdialoguewithregulatorybodiesandpoliticianssupervisorybodiesandauthoritieswhichtakesplaceinrelationtotopicsTheworldsofscienceandculturearespecificallyincorporatedintointernaltopicalopinionformingprocessesviatheUnionInvestmentFoundationandinpartnershipsandstudiesViatheaccountmanagersthereisregularandin-depthcustomerserviceforinstitutionalclientswhiletheretailclientsarelookedafterbytherespectivecooperativebanksandbyourCustomerServicedepartmentInadditionwearerepresentedatnumerousindustrymeetingswithorwithoutexplicitreferencetosustainabilityBoththesecustomergroupsaresurveyedregularlytogaugetheirsatisfactionwiththebusinessrelations

102-42

102-43

102-44

135


In2020externalstakeholdercommunicationwithinvestorsandsalespartnersagainfocusedonhowtodealwithlowinterestratesandaccordinglyhowtosafeguardjeopardisedprosperityDuetothedevelopmentofthecapitalmarketsinrecentyearstheissueofriskmanagementisofgreatrelevancetoinstitutionalclientsinparticularandweworkonthisanddiscussitactivelywithourclientsFurthermoresustainabilityisalsobecominganincreasingfocusintheretailclientsbusiness

AkeyfindingofUnionInvestmentrsquosannualsustainabilitystudyinwhich166majorinvestorswithacapitalvolumeinthetrillionstookpartin2020isthatonlyafewmajorinvestorsarestillrefrainingfromESGinvestmentstrategiesThepercentageofmajorinvestorsmakingsustainableinvestmentshasrisentoarecordfigureof80Demandfromprivateinvestorsalsoincreasedsignificantlyin2020UnionInvestmentsupportedthetopicsuggestionsbysharpeningthefocusofitsportfolioandcommunicationpoliciesRegularengagementwithstakeholdershasdemonstratedthatinthefinancialservicessectorinputthatresultsinactionprimarilycomesfromhighlyinformedstakeholdergroupswhilebroadsurveysrarelygenerateexpedientinputduetotheabstractnessoftheproductsWethereforemakeadistinctionbetweengeneralsurveysofsatisfactionontheonehandandveryspecifictopic-basedengagementofdirectlyimpactedstakeholdersontheother

Keystakeholdersandpercentageof stakeholdergroupsinthematerialityanalysis(figuresin)

102-40

30

2018

7

5

4

4

33

2 1

Managers(n=51) Employees(n=33) Endinvestors(n=31) Cooperativebanks(n=12) Serviceproviders(n=8) Institutionalclients(n=7) ScientificNGOs(n=6) Group(n=5) SRIinitiatives(n=5) Investedcompanies(n=4) Associations(n=2) Journalists(n=1) Rating agencies dataproviders(n=1) Other(n=1)

136


Usingamaterialitymatrixtheareasofactivityarebrokendownintermsoftheirrelevanceaccordingtothestakeholdersurveyonascaleof1(exceptionallyimportant)to5(unimporshytant)TherelevanceoftheareasofactivityforUnionInvestmentisderivedaccordingly

10

30

50

40

20

50 40 2030 10

Society

Corporategovernancecommunication

Productsservices

Rel

evan

ce t

o e

mp

loye

es a

nd

man

ager

s

Relevance to external stakeholders

EmployeesEnvironment

Unimportant

Exceptionally important

43 Advocacy association and committee work

As the materiality analysis shows it matters to our stakeholders that Union Investment representstheinterestsofitsinvestorsandpartnersinrelationtoregulatorsandpolicymakersasoneofGermanyrsquosbiggestassetmanagers

ConsequentlyweworkactivelytoachievearegulatoryenvironmentthatisdesignedtofavourinvestorsandencouragesustainabledevelopmentKeyissuesaretransparencyobligationsaccountabilityandregulationsthatensurestabilityofthefinancialmarketsintheinterestsofourinvestorsandsustainabledevelopmentIn2020wewereparticularlyinvolvedinthe

discussionprocessregardingtheEuropeanCommissionrsquosldquorenewedsustainablefinancestrategyrdquoforexamplewithourresponseaspartoftheassociatedconsultationWithregardtothedesignofthetaxonomytheESGdisclosureobligationsandtheascertainmentofsustainabilitypreferencestoowebroughtourmanyyearsofexperienceinthefieldofsustainableinvestmenttobearatEUlevelinordertocontributetoregulatorymeasuresthatareambitiousandpracticalinequalmeasureTransparencyintermsofpoliticaladvocacyisessentialtoushereThisiswhyweprovideinformationonthefundamentalpositionswehavetakeninournationalandinternationaladvocacy(inassociationsandinourcommentsondraftlegislation)ThiscontentwillbepublishedonUnionInvestmentrsquosdigitalpublicaffairspageldquoFinanzAgendardquowhereourpositionsontheEuropeanCommissionrsquosactionplanonfinancingsustainablegrowthcanalsobefoundInadditiontheUnionInvestmentGroupsupportsthepoliticalworkofpartiesbymeansofnon-cashandmonetarybenefits(forinstanceintheformofsponsorshipactions)Theseamountsarelikewisepublishedonthewebsite

UnionInvestmentsupportsthetransparencyinitiativeoftheEuropeaninstitutionsandislistedintheirtransparencyregisterMajorinitiativeswithaconnectiontosustainabilityarerootedandpublishedasmeasuresinthesustainabilityprogramme

Westrivetocomplywithstrict nationally or internationally recognised standards in everything wedointheareaofsustainabilityNumerouscompanyrepresentativesofUnionInvestmentare actively involved in industryassociationscommitteesandinitiativesofthefinanceandassetmanagementindustriesWepledgedtocomplywiththeUNPrinciplesforResponsibleInvestmentsignedthedeclarationofconformitywiththeGermanSustainabilityCodeinDecember2013andrenewedthisdeclarationinDecember2018InourrealestateactivitieswesigneduptotheGermanPropertyFederationrsquossustainabilitycodefortherealestateindustryWearerepresentedinthesustainabilitycommitteesofourindustryassociations(EFAMABVIVfU)SinceJuly2013UnionInvestmenthasbeenrepresentedontheboardoftheSustainableInvestmentsForum(FNG)andtheGermanAssociationforEnvironmentalManagementandSustainabilitybyitsheadofSustainabilityManagementFurthermorewearealsoactiveintheNationalAssociationofGermanCooperativeBanks(BVR)theGermanEquitiesInstitute(DAI)theEuropeanFundandAssetManagementAssociation(EFAMA)theEuropeanParliamentaryFinancialServicesForum(EPFSF)theSustainableInvestmentsForum(FNG)andtheRoyalInstitutionofCharteredSurveyors(RICS)

415-1

102-12

102-13

137


51 Management approach to the product range

Investingisamatteroftrustndashasacustodianformorethanfourmillioninvestorsresponshysiblehandlingoftheinvestedmoneyandarequirement-orientedrangeofproductsandservicesforourendinvestors(retailclientsofthelocalcooperativebanks)andinstitutionalclientsarethereforeessentialforus

ResponsibilityforlookingafterourinvestorsrsquomoneyinvolvesthechallengeofrespondingtocurrentandsignificanteconomicenvironmentalandsocialtrendsandincorporatingthemintheproductrangegearedtowardsinvestorsrsquorequirementsForinstancethesocialchallengeofdemographicchangeiscloselylinkedwiththestructuringofretirementpensionproductsforthegeneralpublicClimatechangeisparticularlyimportantwhenitcomestodevelopingandmanagingourrealestateandsecuritiesassetsandensuringsoundandresponsiblecorporategovernanceisanimportantelementofourmultidimensionalCSRapproachinPortfolioManagement

Union Investment is committed to abiding by the code of conduct of the German Investment Funds Association Accordingly we comply with the standards of the code in disclosing fund performance as well as responsible and sustainable invest-ments Our product range is geared towards our investorsrsquo needs

ConsultantsoflocalcooperativebanksfindoutdirectlyfromprivateinvestorswhatendclientsneedintermsofproductsOurinvestorsrsquoneedsareconstantlyascertainedthroughdiscussionbetweenconsultantsandtheUnionInvestmentrsquosCustomerServicedepartmentateventsandviafieldsalesandpassedontotherelevantpeopleatUnionInvestmentThisresultsinimpetusformarketingandproductstailoredtoinvestorsrsquorequirementsWeareindirectdialoguewithinstitutionalinvestorssowefindoutwhattheywantfromourproductsatfirsthandInternaldialoguebetweenaccountmanagersandPortfolioManagementthusleadstoidealsolutionsforprofessionalinvestors

We follow national and international industry standardsWealignourproductrangewithinternationallyrecognisedstandardsandimplementthemwhereverthisappearstobeprudentforinstancein2010wesignedthePrinciplesforResponsibleInvestmentasakeystandardforimplementingstabilityinourcorebusinessIntherealestatebusinesswecomplywiththeGermanPropertyFederationcodeforsustain-ablerealestatebusiness

417-1

G4-FS15

G4-FS2

52 Sustainable products

Asat31December2020theUnionInvestmentGroupmanagedEUR61billionofinvestorsrsquomoneyin1359sustainableinvestmentfundsandmandatesaswellasafurther38fundsinoursubsidiaryQuoniamInvestorsrsquofundsundermanagementrosebyEUR72billionyear-on-year

5 Products and services

total assetsInprinciplethefollowingexclusionsapply

bull participations in the producshytionofoutlawedweaponsandnuclearweapons

bull companies that generate morethanfivepercentoftheirturnoverfromcoalproduction

bull coal-firedpowergeneratorsthatdonothaveacredibleclimate strategy and generate morethan25percentoftheirenergyfromthermalcoal

bull derivatives on agricultural commodities

bull emitters involved in unacshyceptableviolationsoftheUNGlobalCompact

ofwhich 2781 billion eurosESGshyintegratedanalysisofrelevantESG factors and systematicconsiderationofESGrisksandopportunities in the investment process

ofwhich 609 billion eurossustainableinvestmentsfundsandmandatesmanagedaccordingtocomprehensive and explicit sustainability criteria in investment decisions

3859 billion euros

138


57

270

34

420163

55

52

18

22

77

17824

14 3123 57

28

3842

60

2085

24

15

28

7 13

11

ForthesustainableinstitutionalpublicfundsmanagedaccordingtoESGcriteriaourclientsreceivemonthlysustainabilityreportsInthereportstheexclusionratesofthefundassetsandtheESGscoresofthefundsarecomparedwiththerespectivepeergroupandtheESGscoresofthelargestinvestmentsaresetout

InvestorsinspecialfundscanincorporateESGinformationintheirindividualclientreportsiftheywish

AcontributiontoreducingCO2emissionsismadebyinvestinginwindfarmsandsolarfarmsintheUniInstitutionalInfrastrukturSICAV-SIFErneuerbareEnergienfundTheportfoliodataispublishedquarterlyThefundrsquosCO2savingstotalled229thousandtonnesin2020

53 Engagement

Asaresponsibleinvestorandactive asset manager Union Investment practises active share ownership(CSR)intheformofamultidimensionalCSRapproachTheprimaryaimistoactivelyinfluencecompaniesthushelpingtoincreaseenterprisevalueAswellasbusinessaspects social environmental and corporate governance issues are also addressed in a targetedwayhere

IndialogueswithcompaniesandatannualgeneralmeetingsUnionInvestmentrsquosPortfolioManagementsegmentregularlyinfluencesthecorporategovernanceandbusinesspolicyofpubliclimitedcompaniesintheinterestsofinvestorsandultimatelytothebenefitofthefundconcernedOurprincipleisthatUnionInvestmentsupportsallmeasuresthatincreaseenterprisevalueonalong-termbasisandvotesagainstthosethatareincompatiblewiththisaim

AbindingvotingpolicyisessentialtotransparentandconsistentexercisingofthevotingrightsentrustedtousThereforeUnionInvestmenthasputinplaceextensivevotingguidelinesgearedtowardstherecommendationsoftheGermanCorporateGovernanceCodeandtheguidelinesoftheGermanInvestmentFundsAssociationTheguidelinesaresetoutintheUnionInvestment ProxyVotingpolicy

UnionInvestmentperformeditsfiduciarydutyandrepresentedinvestorsrsquointerestsbyexercisingvotingrightsat1938annualgeneralmeetingsin28countriesinthereportingyear

203-1

G4-FS5

AlongsidethevotingbehaviourldquoUnionVoicerdquotheconstructivecompanydialogueisthesecondimportantpillarofUnionCSRThemainobjectiveofUnionVoiceistalkingtocompaniestoimprovesustainabilityandthusshareholdervalueintheinterestsofourinvestors

Union Investment has many yearsrsquo experience as an active shareholder which it is applying moreandmoreInthepastreportingyearatotalof681UnionVoiceactivitieswereimplementshyedwithenvironmentalandsocialissuesbeingdiscussedinthecompanydialoguesThisisanincreaseinthenumberofUnionVoiceactivitiesofnearly20comparedwiththepreviousyearThecorporatecontactscover40countriesMostdialogueswereconductedwithcompaniesfromtheindustrialsutilitiesandmaterialssectors

G4-FS10

UnionVote ndash Votes by country 2020

2020 1938 votes

New countries as of March 2021 Bermuda Cayman(USA)IsraelJersey(GB)NewZealandUnitedArabEmirates

139


54 ESG integration in Portfolio Management

WefirmlybelievethatintegratingESGcriteriaintotheinvestmentprocessgoeshandinhandwithpositiveeffectsontheriskmanagementandperformanceofourfundsThereforeourESGdepartmentisintegratedintoPortfolioManagementasaninterdisciplinaryauthorityandisthusinterlinkedwithallmajorassetclasses

OurproprietarySustainableInvestmentResearchInformationSystem(SIRIS)whichwehavebeencontinuouslydevelopingsince2013isusedtogeneratequalitativeandquantitativesustainabilityresearchandimplementoursustainabilityrequirementsSIRISisourresearchplatformwhichmakessustainabilityinPortfolioManagementtransparentmeasurableandcontrollableSince2017ithasbeenusedacrossPortfolioManagementatUnionInvestmentandisavailabletoeveryportfoliomanagerThesustainabilityexpertiseisstrengthenedwithregulartraining

TheESGCommitteeasthemostseniorESGbodyinUnionInvestmentrsquosPortfolioManagementisresponsibleforsettingabindingsustainableinvestmentstrategyTheESGCommitteeensuresthatESGfindingsareintegratedintothefundamentalresearchprocessonanongoingbasisItdealswithallsectorsandassetclassesthatduetospecificeventsandorstructuraltrendsareparticularlyrelevantforriskincomeandvaluationconsiderationswithregardtosustainabilityaspects

55 Conferences and studies

ToraiseawarenessoftheimportanceofsustainabilityininvestmentdecisionsUnionInvestmentholdsanannualsustainabilityconferenceondifferenttopicseachtimeIn2020thedigitalconferencewasdevotedtothefollowingquestionldquoHowhascoronaviruschangedtheworldwhatwillremainthesameandaboveallhowshouldanactiveassetmanagerrespondtothischangerdquo

EachyearUnionInvestmentexaminestheattitudeofGermanmajorinvestorstosustainableinvestmentandsummarisestheresultsinasentimentindexInadditionweregularlyhavecurrentsustainabilityissuesscientificallyassessedbyvariousacademicsandinternallywithinPortfolioManagement

G4-FS11

56 Sustainability in real estate investments

InthefollowingsectionUnionInvestmentreportstoitsemployeesclientsbusinesspartnersandinterestedmembersofthepubliconitsactivitiesinthefieldofsustainablerealestatemanagementThisincludesnotjustapresentationofthevariousprocessesandinstrumentsbutalsoinparticulartheconsumptiondatagatheredandextrapolatedforinvestmentfundsoverthelastthreeperiodsUnionInvestmentisthereforemakinganimportantcontributiontotransparencyasabasisforthesustainableongoingdevelopmentoftherealestateinvestmentsector

561 Understanding sustainability as future viability ClimateProtectionPlan2050oftheGermanyfederalgovernmentldquoActionPlanonSustainableFinancerdquofromtheEuropeanCommissionUNClimateChangeConference2018inKatowicendashmanylandmarkpoliticaldecisionshavebeenresolvedorarebeingbroughtforwardWithveryhighconsumptionofresourcesandpotentialforemissionstherealestateindustryisoneofthoseinthespotlightandisincludedintheambitioustargetofachievingextensiveldquoclimateneutralityrdquoby2050SustainabilityhasthusnolongerbecomeachoiceItisanessentialelementofeverylong-termstrategy

Asaforward-lookingassetmanagerUnionInvestmenthasbeenworkingonthesustainablealignmentofitsactivitiesrelatingtobuildingsinitsportfoliofornearly15yearsAfterallthefutureviabilityofitspropertyportfolioisthefoundationstoneforthemostimportantaimofmanagingandincreasinginvestorassetsinaresponsiblemannerTodothisUnionInvestmenthasimplementedasustainabilitystrategywhichitpursuesonanongoingbasisForimplemenshytation Union Investment has developed its own instruments which are applied not only at buildingbutalsoatportfoliolevelBymeasuringconsumptiondataandbyimplementingvarioussustainabilitycriteriaanimportantbasiswasestablishedforfurtherimprovingthepropertiesWiththeassistanceofadvancingdigitalisationthisdatabaseisbecomingincreasinglypreciseandtheoptimisationmeasuresimplementedmoreandmoreeffectiveFurthermeasuressuchasintegratingtenantsandstaffbutalsocommitmentacrosstheindustryarebeingleveragedtofindnewsolutionsformoresustainability

562 Sustainability management processes

5621 ComprehensiveunderstandingofsustainabilityUnionInvestmentiscommittedtoresponsibleactionandhasvowedtoplayitsownpartinmaintaininganintactenvironmentThisincludesintegratingsustainabilitycomprehensivelyandsystematicallyintoitsbusinessprocessesFortherealestatesectorthismeansreducingtheenvironmentalimpactofpropertiesonanongoingbasiswhilemaintaininglong-termfinancialsuccessandtherebygraduallyimprovingthepropertyportfolio

1Eachlessthenumberofresidentialbuildingsandpropertiesunderconstructionorrestructuringseealso32Portfoliounderreview

140


In 2011 Union Investment introduced a comprehensive environmental management system (EMS)andwassuccessfullycertifiedaccordingtotheinternationalstandardDINENISO14001InadditiontooperationalecologyietheenvironmentalimpactofoperationsthissystemlooksatproductecologyietheenvironmentalimpactoftheldquorealestatefundsrdquoproductAspartoftheenvironmentalmanagementsystemthequalityoftheprocessesissecuredandtheirprogressismonitoredEachyearauditsareimplementedtocheckprogressInadditionrecertificationtakesplaceeverythreeyearsthelasttimein2019whentheauditordeterminednodeviations

UnionInvestmenthasestablishedtheresponsibilitiesofitsbusinessunitsbyenshriningtheissueofsustainabilityinitsguidelinesandprogrammesatcompanylevelUnionInvestmentrsquosvoluntarycommitmenttostructuringitsbusinessprocessesinaccordancewiththerequireshymentsoftheGermanPropertyFederationcode(sustainabilitycodeoftheGermanPropertyFederation)hasthereforebeensatisfied

UnionInvestmentrsquossustainabilityinstrumentsareappliedthroughouttheentirelifecycle oftherespectivepropertiesObjectivesarepursuedintheacquisitionlettingandmanageshymentandintherenovationandrevitalisationofbuildingsthatcontributetomaintainingthevalueofthepropertiesandtheirfutureviabilityandsupportingbusinessperformance inthelongtermExternalserviceprovidersareintegratedintothesustainabilityprocesses

UnionInvestmentalsounderstandsholisticsustainabilitymanagementtoencompassnotonlytheconsumptionandemissionsresultingdirectlyandindirectlyfromoperationsbutalsotheenvironmentalimpactofthepropertiesheldintheportfolioAsthemainenvironshymentalimpactsresultfromtheconsumptionandemissionscausedbythepropertiesheldthesearepresentedexplicitlyinthefollowingsectionsAccordinglytheCO2 emissions generatedintherealestateportfolioarereportedasScope3emissionsinaccordancewith theUnitedNationsGreenhouseGasProtocolThedirectandindirectemissionsresultingfromoperations(Scopes1and2)areshownonpage166ofthereport

5622 AnalysisandevaluationinstrumentsTheRealEstatesegmentmanagesandreportssustainabilitydataforinternalpurposessuchasfundandpropertyreportsaswellasforexternalpurposessuchastheannualratingsbyScopeandGRESBThesuccessfulintroductionofImmoSustainthisyearmeansthatthereisnowacentralplatformfortheconsumptiondataandsustainabilishytymanagementoftherealestateThisprovidedactiveandabovealleffectivesupportforthegoalofaclimate-neutralbuildingstock

OneofthebigadvantagesofthesystemisthattherecordingofconsumptionisautomatedEachmonththeutilitiesuploadtheirbillstoImmoSustainThesearethenreadautomaticallyusingartificialintelligenceEvenbetterthesystemundergoesalearningsprocessOnthebasisofthedatasuppliedastimegoesonitrecogniseswhentheinformationforapropertyiscompleteandwhethertherearestillgaps

ThesoftwareusesthesubmitteddatatoautomaticallygenerateideastoimprovethepropertiesThesesustainabilitymeasurescanbetrackedinthesystemandserveasabasisfordiscussionswithtenantsusersorpropertymanagersforexampleAtthesametimeImmoSustainoffersahighlevelofuserconvenienceastherespectiveusergroupscandetermineandevaluatethedataandanalysesrelevanttothem

Keyperformanceindicators(KPIs)ThekeyperformanceindicatorscomprisealltheconsumptiondataspecifictorealestatesuchaselectricityheatingandwaterconsumptionthevolumeofwasteproducedandCO2 emissionsRecordingandevaluatingconsumptionfiguresallowspropertyoptimisationpotentialtobeidentifiedandsavingstargetstobedefinedbothatpropertyandportfoliolevelsMeasuresformoreefficientuseofresourcesandforreducingoperatingcostscanthenbeintroducedandthetargetsmonitoredThesustainabilitytoolImmoSustainthereforeformsthefoundationofthelong-termorientationofUnionInvestmentrsquosinternationalrealestateportfolioConsumptiondataisrecordedautomaticallyandwithoutmanualeffort

SustainableInvestment-Check(SICheck)WiththesustainableinvestmentcheckdevelopedspecificallybyUnionInvestmentbuildingsareassessedintermsoftheirsustainablequalityasearlyasthepurchasingprocessOptimisashytionpotentialcanbeidentifiedandmeasurestoimprovethepropertiescanbeplannedatanearlystageTheSIcheckisalsoappliedtobuildingsalreadywithintheportfoliowithcriteria inthebuildingautomationbuildingshellandtechnologyresourceseconomyusercomfortmeasuresinoperationandlocationbeingexaminedandanalysedThisinstrumentnotonlydeterminesthecurrentconditionofabuildingbutalsochecksitsspecificdevelopmentpotentialTheSIcheckwasdevelopedonthebasisofcommoncertificationsystemsandiscontinuouslyexpandedandadaptedtothelatestmarketdevelopments

141


ThecombinationoftheSIcheckforqualitativeassessmentandtherecordingofKPIsforquantitativeanalysisguaranteethatUnionInvestmentcomprehensivelydocumentsandevaluatesrealestateandportfoliodataonanannualbasisAtthesametimeitfollows uptheimpactoftheactionsithastakenandissuccessivelyintegratingthisreviewofthesuccessoftheactionsintoworkprocessesasastandardrequirement

InternalbenchmarkingUnionInvestmentappliesreliabledataadjustmenttotheKPIsrecordedincompliancewiththeGermanPropertyFederationrecommendationsldquoSustainabilityBenchmarkingndashWhatandHowShouldComparisonsbeMaderdquoThisensuresthecomparabilityoftheportfoliobuildingsandfacilitatesinternalbenchmarkingbasedonthetypeofuseAssetandfundmanagerscanusethesebenchmarkstoobtainindicationsofpotentialimprovementsatpropertyandportfoliolevels

Energy monitoring EnergymonitoringcanbeusedtorecordandanalyseconsumptiondataegforelectricityheatingcoolingorwaterinshorttimeintervalsandtoderiveenergyoptimisationsIn2020UnionInvestmentextendedthepilotprojectlaunchedin2019to27propertiesInadditiontotheGermanofficepropertiesfrom2019propertiesofotherusetypesandpropertiesinEuropewerenowalsoincludedThestandardisedmonitoringistocreateabasisforcalculatingspecificenergysavingpotentialandusingthispotentialincooperationwithpropertymanagersandtenants

CertificationWhiletheaforementionedinstrumentsallowsustainabilitycriteriatobemanagedthroughouttheentirerealestateportfoliothecertificationofportfoliopropertiesisanadditionaltoolthatmakessustainablepropertyqualitiestransparentforusersandotherstakeholdersinparticularUnionInvestmentexamineswhethersuchcertificationmakessenseforindividualpropertiesFornewconstructionprojectsandextensiverenovationscertificationisanimportantsignofqualityinimplementingsustainabilitycriteriaThesemustbetakenintoaccountduringthepropertyplanningandconstructionphasesinordertocreateoptimumconditionsforsubsequentsustainablebuildingoperations

Proportionsofportfoliopropertieswithcertificationorpre-certification

2018 2019 2020

Numberofproperties

according to SV-value

Numberofproperties


Numberofproperties


148 63 155 66 216 70

SourceUnionInvestmentcorrectasat31DecemberoftherespectiveyearThestatisticsincludethefollowingfundsUniImmoDeutschlandUniImmoEuropaUniImmoGlobalUniInstitutionalGermanRealEstateUIIHotelNr1UIIShoppingNr1DEFO-Immoshybilienfonds1DIFA-FondsNr3UniInstitutionalEuropeanRealEstateUrbanCampusNr1UIIGermanMimmofonds1UrbanLivingNr1 UII EuropeanM

5623 RatingScoperegardsUnionInvestmentasaleaderinimplementationofsustainabilitystrategyUnionInvestmenttakespartintheScoperatingScopehasincludedsustainabilitycriteriainitsassessmentofopen-endedrealestatefundssince2013andthecriteriaareoccasionallyupdatedIn2018theUniImmoDeutschlandUniImmoEuropaUniImmoGlobalUniInstishytutionalEuropeanRealEstateandUni-InstitutionalGermanRealEstatefundswerepredomshyinantlyratedasamongthebestintheindustryinsustainabilitymattersOverallScopeconfirmedonceagainthatUnionInvestmentisaleaderinorganisationalandadministrativeimplementationofsustainabilitystrategy

5624 RaisingstakeholderawarenessFullysustainablerealestatemanagementthrivesoncontinuousandopenexchangewithrelevantinterestgroupsUnionInvestmentthereforeinformsandraisesawarenessamongits employees and also market participants investors clients and tenants regarding the opportunitiesandnecessitiesofsustainabilityusingavarietyofmediaandevents

Thenewsustainabilitymagazineatmospherewaspublishedforthefirsttimein2019ThismagazinegivesinvestorsclientstenantsandinterestedpartiesinsightsintosustainablerealestatemanagementatUnionInvestmentThenextissuewillbereleasedindigitalformatin2021

AnotheropportunityfordialogueistheknowledgeportalrunbyUnionInvestmentat wwwnachhaltige-immobilien-investmentsdeSpecialistarticlesbyvariousmarketplayersonsustainabilityaspectsandtheirpracticalimplementationsetoutdifferentperspectivesandalsoencouragediscussionwithtenantsclientsandbusinesspartnersThisiscompleshymentedbycurrentinformationandnews

142


Socialengagementawin-win-winsituationWithover200differentactivitiesinrecentyearssocialengagementisafixedpartofUnionInvestmentrsquosrealestateportfolioSomeexamplesInMadridpinksheetsofpaperweredistributedtotenantsforthemtostickintheirwindowsformingagiganticribbonacrossthebuildingThisraisedawarenessoftheriskandmindfultreatmentofbreastcancerInWarsawUnionInvestmentinvitedtheRedCrosstogivetenantstheopportunitytodonatebloodonsiteInSanFranciscotenantswereshownwaystoholdbackclimatechangeonldquoEarthDayrdquoInManchesterUnionInvestmentsupportedatenantinitiativetohelpthehomeless

In 2020 Union Investment strategically evaluated social engagement at the real estate locationsforthefirsttimecompilingacatalogueofthemostpromisingactivitiesthatcanbeundertakenatmostlocationsThiscataloguecontainsrecommendationsfortheinitiationperformanceandevaluationofeachactivityAlthoughmostactivitiesarevirtually costshyneutral to implement we determined that nearly all activities represented awin-win-winsituation

First win tenant satisfactionInmostactivitieswehaveobservedthetruthofthescientificdiscoverythatsocialengagementhasapositiveimpactonthoseengagedinitThevoluntaryengagementbroughtgreatjoytoalargenumberofourtenantswhichcouldbeseenbothinthehighrateofparticipationandintheparticipantsrsquosmilingfaces

Second win social valueThe activities allow the properties to put down roots in their respective communities and createageneralbeneficialeffectbeyondthetraditionaleconomicvalueofapropertyThismakesthepropertiesmoreimportantfortheneighbourhoodpeopleandenvironmentwhichbenefitfromtheactivitiesInthecaseofactivitiessuchasfooddonationsfortheneedyinParisorcuttingdownfoodwasteinViennathesocialvalueisobviousHoweveractivitiessuchasbicyclerepairsinHamburgalsohelpbothtenantsandtheenvironmentinthelongterm

Third win economic value ThetenantsrsquosatisfactionfromthefirstwinhasadirectimpactontheireconomicdecisionsandpositivelysupportslettingactivitiesApartfromthekeyeconomicdatageneralsatisfactionalsoplaysasignificantroleinadecisiontosignorrenewatenancyagreementTraditionallythisdecisionisbasedonlocationwithnearbyinfrastructureandconveniencessuchastheavailabilityofrestaurantsdoctorsgymsandshopsandonthedesigntechnicalspecificationsandflexibilityoftherentalspaceSocialengagementgivespotentialtenantsanotherargumentfororagainstalease

In the years to come Union Investment expects a steady increase in social activities and correspondinggrowthintheavailabledataTheimpactofengagementwillcontinuetobemeasuredonthisbasisinthefuturesoweareconfidentthatwewillsoonbeabletoexpressthesubjectiveperceptionofthetriplewininconcretefiguresUnionInvestmentalreadyhasin-houseexpertsforcertainsocialactivitieswhoseexperienceisveryusefulwhenitcomestoplanningnewactivities

143


5625 ObligationsplacedonpropertyusersTheoperatingphaseisthelongestpartofapropertyrsquoslifecycleandthereforeconstitutesasignificantleverforsustainabilityinandatthepropertyPartnership-basedcooperationbetweentenantsandlessorsisessentialifthepropertyrsquospotentialistobefullyutilisedThroughgreenleasesusersandownersundertaketouseandmanagethepropertysustainablyinorderto ensure that it maintains its value in the long term and not least that operating costs remain reasonableThisincludesforexampletheprovisionofinformationonandregularexchangeofsustainability-relateddatastipulationsregardinglow-pollutantconstructionandcleaningmaterialsandassistancewithlow-impactusageForcertifiedpropertiesthepartiescanalsoagreetoseekorimprovecertification

In2018theGermanPropertyFederationpublishedaldquoGreenLeasesforGermanyrdquoguidelineHereitshouldbeemphasisedthataprecisedefinitionofaGreenLeasewasdeterminedforthefirsttimeUnionInvestmentexpandeditsstandardleaseagreementsforofficeslogisticsbuildingsandhotelsinGermanywiththeldquoGreenProvisionsrdquoinlinewiththeGermanPropertyFederationdefinitionandisalsodeployingthemprimarilyfornewleases

5626 ObligationsplacedonserviceprovidersUnder the environmental management system Union Investment has undertaken to incorposhyrateenvironmentallyrelevantcriteriaintothedevelopmentofproductsandservicescontractsfortenderandtheselectionofbusinesspartnersInrealestateassetmanagementthishasbeenafactorinthecontractdesignofpropertyandfacilitymanagerssince2014AsitaimstoconstantlyimproveitsenvironmentalperformanceUnionInvestmentrequiresitsserviceproviderstoapplysustainableprinciplestotheiractivitiesandtoimposesimilarobligationsontheirbusinesspartnersUnionInvestmentexaminesthecomplianceofitsserviceproviderswiththeobligationsofenvironmentallawannuallyinaprocessconductedatthepropertylevel

5627 InformationsharingandbenchmarkingwithintheindustryAspartofitsparticipationinanumberofinitiativesUnionInvestmentregularlysharesinformationwithotherportfolioholdersIthasbeenamemberoftheUrbanLandInstitute(ULI)whichcampaignsforthesustainabledevelopmentoflivingenvironmentssince1999AsafoundingmemberoftheGermanSustainableBuildingCouncil(DGNB)UnionInvestmenthasalsobeencontributingitsexpertiseandexperiencetowide-rangingworkgroupsandexpertpanelssince2007

UnionInvestmenthasbeenamemberoftheGermanPropertyFederationsinceJune2008andhasbeenheavilyinvolvedinthedevelopmentoftheindustry-widesustainabilitycodeUnionInvestmentcontributesitsknowledgeandexperiencetomanyworkgroupsandcommitteesoftheGermanPropertyFederationandthusactivelyadvancestheissueofsustainabilitywithintheindustry

AsamemberoftheGermanInvestmentFundsAssociationUnionInvestmentplayedanactivepartindrawinguptheguidelinesforsustainablerealestateportfoliomanagementpublishedin2016Theguidelinesaimtoidentifyperformanceindicatorsatthefundandportfoliolevelsinordertoensuresustainabilityandhencelong-termreturnsforinvestors

ECOREanindustrystandardformeasuringsustainabilityperformanceSincethestartof2020UnionInvestmenthascollaboratedintheldquoESGCircleofRealEstaterdquo(ECORE)initiativeonthedevelopmentofanindustrystandardformeasuringthesustainabilityperformanceofpropertiesandportfoliosThenewscoringmodelisbasedonthesustainabilitylabelldquoatmosphererdquointroducedbyUnionInvestmentin2019Onascalefromzeroto100tenantsandinvestorscanseethepercentagetowhichapropertyoraportfoliomeetsenvironmentalsocialandgovernance(ESG)criteriaThisalreadytakesintoaccountthetaxonomycriteriaoftheEUrsquosActionPlanonSustainableFinanceandthetargetsoftheParisAgreementonclimatechange

ThescoringmodelisacomprehensivesetofcriteriacomprisingthreeclustersnamelyldquoGovernancerdquoldquoConsumptionandEmissionsrdquoandldquoAssetCheckrdquoldquoClusterI-Governshyancerdquoexaminessustainabilityandmanagementintheportfoliocommunicationandexternalqualityassurance(egcertificationsratings)Subjectsofanalysisincludewhether tenant exclusion criteria are applied or green tenancy agreements have beenconcludedThecentralissuesinldquoClusterII-ConsumptionandEmissionsrdquoareenergy consumption CO2emissionswaterconsumptionthevolumeofwasteandtheldquoParis-readyrdquoassessmentiethecomparisonwiththetargetdataoftheclimatechangeagreementfor2030)ldquoClusterIII-AssetCheckrdquocompriseseightqualitativeissuesbuildingautomationshellandtechnologyresourcesusercomforteconomylocationmeasuresinoperationandfutureviability

TheresultingscoreshowswheretherespectivepropertyorrealestateportfolioisintermsofESGontheonehandandontheotherhandidentifiespotentialandmeasurestoachievetherelevanttargetsTheopensourcemodelprovidesaspecificplanofactionformeasurestoachievetherespectiveESGtargetsTheECOREscoringmodelthereforehasatangiblebenefitforeveryinvestoranduserInadditionitmeansthatsustainabilityperformancecanalsobecomparedwithintherespectivepeergroupndashallwithouttoomucheffort

144


563 Property-specific portfolio consumption dataWithitssustainabilitytoolImmoSustainUnionInvestmenttracksproperty-specificconsumptiondataforthebuildingsinitsportfolioeachyearOneoftheaimsistoidentifyoptimisationpotentialforpropertiesandmonitorthesavingstargetsthroughinternalbenchmarkingCorrespondingworkonbuildingscanthenbeinitiated

5631 MethodByrecordingconsumptiondataforitspropertyportfolioUnionInvestmentensuresthetransparencyofitsportfolioandcanderiverecommendationsforactionatthepropertyandportfoliolevels

SincetheintroductionofthenewldquoImmoSustainrdquotooltherecordingofconsumptionhasbeenautomatedEachmonththepropertymanagersuploadtheirutilitybillstoImmoSustainThesearethenreadautomaticallyusingartificialintelligenceOftenhoweverthefiguresforheatingandwaterareavailableonlyintheformofannualstatementsandthepropertiesrsquodifferingbillingcyclesmakeitevenmoredifficulttorecordthedataTheadditionaltimerequiredforqualityassurancemeansthatthereisalagofoneyearintherecordingofconsumptiondataforreportingAccordinglythisreportisbasedontheconsumptiondatafor2019Consequentlythedatafor2020cannotbeincludedinthecurrentanalysisTheanalysisencompassesfinalenergyconsumptionCO2 emissions water consumption and the volumeofwasteproduced

ThefiguresinthisreportareshownasabsolutevaluesaswellasspecificvaluespersquaremetreandyearInlightoftheinternationalorientationandheterogeneousnatureoftheportfoliospecificconsumptiondatawasadjustedforaspectsthatarespecifictocountriespropertiesandusesandthatinfluenceapropertyrsquosenvironmentalperformanceTheseincludebuildingcharacteristicssuchasvacancyratesandspecialusesandalsotakeintoaccountlocalweatherconditionsThisresultsincomparableconsumptiondatathatcanbeassessedwiththehelpofinternalbenchmarksThedatausedfortheanalysisofenvironmentalperformancewasrecordedfortheentirefloorareaofeachbuildingandincludesconsumptionbytenants

ThecontinuouslychangingnatureoftheportfoliomeansthatcomparabilitybetweenyearsislimitedparticularlywithregardtotheabsolutefiguresToimprovethecomparabilityofthecurrentyearsthefollowinganalysisalsodiscussestheconsumptiondataforalike-for-likeportfolioTheupdateddatarecordingandmethodologywillleadtooptimisedresultsinthefuturetherebyprovidingbettercomparabilityoverthelongterm

Consumption dataAbsolute valuesprovideinformationontheoverallconsumptionofanindicatorTheconsumptiondatafortheportfolioincludedintheanalysisisextrapolatedforthetotalportfoliousingafloorareafactorAbsolutevaluescannotbeusedascomparativevaluesastheydonotrelatetootherkeyperformanceindicators(egsquaremetres)

Specific valuesdefineaquantitydependentonitsenvironmentThespecificKPIsofUnionInvestmentmainlyrelatetotheenergyreferenceareainsquaremetresandyearsThesevaluesthereforeessentiallydescriberesourceefficiencyinrelationtoareaAspreviouslyonlytheconsumptiondataactuallyrecordedfortheportfolioreviewedisincludedinthecalculationSpecificvaluesthereforeprovidecomparableindicatorsthatallowcomparisonsbetweenpropertiesorfundsInadditionspecificconsumpshytionKPIsatUnionInvestmentareadjustedforfactorssuchasvacancyratesclimateandspecialuserstofilteroutfluctuationswithinthesefactorsandtocreateoptimumcomparabilityofvalues

Like-for-like portfoliocontainsonlybuildingswhichhavebeenpartoftheUnionInvestmentportfoliofortwoconsecutivecalendaryearsandforwhichtherearequality-assuredconsumptionfigures

5632 PortfoliounderreviewUnionInvestmentrsquosrealestateportfolioissubjecttoconstantchangePropertiesarecontinushyouslypurchasedandsoldduringthecourseoftheyearaspartofactiveportfoliomanagementSelectedportfoliopropertiesarealsosubjecttorestructuringandrenovationprocesses

ThisdynamicdevelopmentmeansthattheportfoliocannotbeexaminedexhaustivelyAccordinglyUnionInvestmentaimstorecorddataforalargerepresentativesubport-folioconsistingofatleast75ofitstotalportfolio(intermsoffloorarea)Theconsumpshytiondataforthepropertiesexaminedisthenextrapolatedfortheportfolioasawhole

TheportfolioasawholecontainsactivelymanagedpropertiesintheofficeretailhotelandlogisticsusagetypesAsat31December2020theportfolioconsistedof379propertiesProperties under construction or conversion and residential properties are not included in thisanalysis

145


In2020theambitiousgoalwasachievedagainFor287propertiesie77oftheportfoliofloorareaconsumptiondatawasrecordedandsubjectedtoqualityassurance

Thepropertiesreviewedarerepresentativeoftheoverallportfoliointermsofusagetypesandfloorareaandthedataextrapolatedfortheportfolioasawholeisconclusive

Portfoliounderreview

Type of use 2017 Number of properties Floor area in m2 Floor area in

Officebuildings 174 3152417 51

Retailbuildings 52 1715929 28

Hotelbuildings 45 706889 12

Logisticsbuildings 10 555477 9

Total 281 6130713 100






Total 230 6220830 100






Total 287 7382628 100

Extrapolatedportfolio






Total 358 7553524 100






Total 326 8278251 100






Total 379 9647660 100

146


5633 MainfindingsInsummarytherewasonlyaminorchangeinthespecificvaluesforallconsumptiontypesintheoverallportfoliofrom2017to2019SpecificwaterconsumptioninparticularremainedverystableovertheyearsInthelike-for-likeanalysisoftheportfolioietheanalysisofpropertiesthatwereintheportfolioinboth2018and2019therewereslightreductionsinfinalenergyconsumptionandCO2emissionsDuetoconsiderableportfolioturnoverthecompositionoftheportfoliorsquosrealestatechangedsignificantlyresultinginidentifiablefluctuationsinindividualconsumptionvaluesespeciallyinthesubdivisionbytypeofuse

Floor area in total portfolioreviewed(in)

Numberofbuildingsin totalportfolioreviewed(in)

Comparisonofreviewedportfoliofloorarea andtotalportfoliofloorareabybuildinguse(in)

Floor area reviewed Floor area not reviewed


Portfolio under review



Total portfolio

Total portfolio

Total portfolio

2019

2018

2017

2017

19

81

2017

22

78

2019

23

77

2019

24

76

2018

25

75

2018

29

71

48

50

51

42

46

48

34

31

28

30

32

28

11

9

12

12

11

13

7

9

9

16

11

11

Officebuildings Retailbuildings Hotelbuildings Logisticsbuildings

147


5634 TotalvaluesThe extrapolationofthereviewedKPIstoreflecttheoverallportfolioproducedthefollowingabsoluteandspecificvalues

AbsoluteandspecificvaluesforalltheKPIsforthetotalportfolio(extrapolated)

Absolute values for all the KPIs for the total portfolio (extrapolated)

2017(358

properties)

2018(326

properties)

2019(379

properties)

Final energy consumption [GWha] 1620 1614 1633

Directfinalenergyconsumption [GWha] 139 164 180

Indirectfinalenergyconsumption [GWha] 1481 1450 1453

CO2 emissions GRI 305-3 [t CO2a] 434918 434744 450307

Direct CO2 emissions [t CO2a] 33246 26085 40528

Indirect CO2 emissions [t CO2a] 401672 408659 409779

Water consumption GRI 303-1 [msup3a] 4518574 4506013 4403141

Volume of waste [ta] 52380 52365 54186

Specific values portfolio under review 2017 2018 2019

Final energy consumption value G4-CRE1

[kWh(msup2a)] 226 227 231

Energy consumption value heating [kWh(msup2a)] 84 81 81

Energy consumption value electricity [kWh(msup2a)] 142 146 149

CO2 emissions G4-CRE3 [kg CO2(msup2a)] 56 58 63

SpecificCO2 emissions heating [kg CO2(msup2a)] 15 15 14

SpecificCO2 emissions electricity [kg CO2(msup2a)] 41 43 48

Water consumption G4-CRE2 [msup3(msup2a)] 057 057 056

Volume of waste [kg(msup2a)] 66 65 70

305-3303-1G4-CRE1G4-CRE2G4-CRE3G4-CRE8

Unadjusted values for 2019 portfolio under review

Portfolio under

review

Office buildings

Retail buildings

Hotel buildings

Logistics buildings

Specific final energy consumption G4-CRE1

[kWh(msup2a)]

223 231 217 262 63

CO2specificcarbon emissions G4shyCRE3

[kg CO2(msup2a)]

57 51 63 74 21

SpecificwaterconsumptionG4shyCRE2

[msup3 (msup2a)]

069 063 068 147 005

Note on data quality

Quality assurance ndashIndependentpartiesmanuallyandobjectivelyreviewedtherecordeddataforeachpropertytocheckthatitwascompleteandplausible

Completeness of data ndashIncaseswheresomeoftheconsumptiondatawasunavailableitwasaddedonthebasisofreferencevaluesThemechanismdevelopedforthispurposeincorporateduse-relatedaveragesfromdifferentsourcesandhistoricalportfoliodata

Extrapolation ndashIfitwasnotpossibletodeterminesomeofthedatainfull(suchastenantdata)datawasextrapolatedonthebasisofusageandwithafloorareaweightingonthebasisofreferencevalueswithinthesoftwareused

Adjustment ndashSpecificdatawasadjustedtoensurethatthepropertiesintheinternationalportfoliowerecomparableFinalenergyconsumptiondatawasadjustedforclimatevacancyratesandspecialusersTheclimateadjustmentwasappliedusinglocation-relatedweatherperiodsforthelastfewyearscomparedtothelong-termaverageperclimatezoneThespecificconsumptionvaluesforwaterandwastewereadjustedforspecialusersGreenhousegasemissions(shownasCO2equivalentsorCO2)whicharecalculatedonthebasisofcountry-specificemissionsfactorsarenotadjustedAbsolutevaluesarenotadjusted

Energy reference area ndashThetotalfloorareainabuildingthatisheatedortemperature-controlled

Note Energy consumption and CO2emissionsareshownseparatelyaccordingtodirectandindirectprimaryenergysourcesDirectprimaryenergysourcesareforexamplecoalnaturalgasoilbiofuelsetcieenergygenerateddirectlyon-sitebymeansofcombustionIndirectprimaryenergysourcesareforexampleelectricityfromfossilfuelsnuclearenergydistrictheatingandothersiepurchasedenergy

148


5635 Absoluteandspecificconsumptionvaluesfortheportfoliobytypeofuse

Directenergyisenergyinwhichthefossilfuelisactuallyburnton-siteorinaprocessownedorcontrolledbythecompanyconcerned(suchasnaturalgasforaheatingsystemintheorganisashytionortheconsumptionoffuelbyacompanyrsquosvehiclefleet)Indirectenergyisenergyinwhichthefossilfuelisburntoffsiteoroutsidethecontrolofthecompanyconcernedtomeettheneedsoftheorganisationforsecondaryenergy(suchaselectricitydistrictheatingorcooling)

TheabsoluteenergyconsumptionfiguresincreasedslightlycomparedwiththepreviousyearThisisduetothelargerportfoliowhiletheratioofdirectandindirectenergysourcesremainedatroughlythesamelevel

Absolutefinalenergyconsumptionbrokendownbydirect andindirectprimaryenergysources(GWhyear)

Shareofconsumptionbyextrapolatedportfolio

byprimaryenergysourceperyear

Absolutefinalenergyconsumption bydirectprimaryenergysource

Absolutefinalenergyconsumption byindirectprimaryenergysource

2017

9

91

2019

11

89

2018

10

90

1620 1614 1633

149


Between2017and2019therewasconstantdevelopmentinabsoluteenergyconsumptionTheslightpercentageincreaseinenergyconsumptionintherespectivetypesofuseisroughlyinlinewiththepercentagegrowthinfloorarea

Shareofconsumptionbytypeofuseperyear

Absolutefinalenergyconsumption(GWhyearextrapolatedportfolio)

Consumptionbytypeofuseandyear

Officebuildings Hotelbuildings Retailbuildings Logisticsbuildings

2017

3

16

34

47

2019

3

14

37

46

2018

3

15

34

47

1620 1614 1633

2017

758

2018

755

2019

753

Office buildingsTotal portfolio

2017

553

2018

553

2019

603

Retail buildings

2017

254

2018

250

2019

232

Hotel buildings

2017

55

2018

56

2019

45

Logistics buildings

150


Averageconsumptionofportfolioperyear

bytypeofconsumption

Specificfinalenergyconsumption[kWh(msup2year)]G4-CRE1

Averageconsumptionofportfoliobytypeof

useandyearbytypeofconsumption

Amongthespecificenergykeyindicatorsintheoverallportfoliofrom2017to2019aslightincreasecanbeseenintheretailportfolioTheincreaseintheportfolioresultsinthespecifickeyenergyindicatorsincreasingPropertieswithdeviatingfigureshavealreadybeenidentifiedandwillbesubjectedtoadetailedexaminationshortlyApartfromtheretailportfoliofinalenergyconsumptiondeclinedslightlyintheothertypesofusedespitetheincreaseintheirshareofthefloorareabyadouble-digitpercentageMeasurestakenimpacttheportfolio

Energyconsumptionvalueelectricity[kWhmsup2] Energyconsumptionvalueheating[kWhmsup2] Portfolioaverageoverthreeyears[kWhmsup2]

2017

63

37

2019

65

35

2018

64

36

226 227 231228 228

42 41

58 59

2017

242

2018

243

2019

237


2017

223

2018

225

2019

244

Retail buildings

2017

295

2018

290

2019

276

Hotel buildings

2017

69

2018

72

2019

67

Logistics buildings

43

2049

4257

80

51

58

2255

39

2452

42

78

45

61

7648

58

151


InthefollowingthetermldquoCO2rdquoisusedasasimplificationandabbreviationforldquoCO2equivashylentsrdquoOthergreenhousegaseswerecalculatedandconvertedusingfactorsinlinewiththespecificationsoftheUnitedNationsrsquoGreenhouseGasProtocolAsdiscussedinsection21UnionInvestmentclassifiestheemissionsgeneratedbyitsportfoliopropertiesasScope3emissionsRecordingtheoriginoftheScope3emissionsmeansthattheycanalsobebrokendownintodirectandindirectemissions

TheabsoluteCO2 emissions which are otherwise known as the CO2footprintorcarbonfootprintarebasedontheconsumptionofheatingandelectricityIn2019theCO2footprintoftheoverallportfoliowasaround450300tonnesEmissionsincreasedsomewhatcomparedwiththepreviousyearComparedwiththedevelopmentofabsoluteenergy consumption CO2 emissionschangedatanapproximatelysimilarrateHeretootheincreaseisduetothenetgrowthoftherealestateportfolio

305-3

Shareofemissionsportfoliobyprimaryenergysourceperyear

Direct CO2 emissions [t CO2eyear]

Indirect CO2 emissions [t CO2eyear]

2017

8

92

2019

9

91

2018

6

94

434918 434744 450307

AbsoluteCO2 emissionsbrokendownbydirectandindirectprimaryenergysources (tCO2eyearextrapolatedportfolio)

305-3

152


AnanalysisoftheshareofCO2emissionsbrokendownbytypeofuseshowsthatemissionsfromretailandhotelbuildingsincreasedslightlyInbothcasesthisisattributabletonewlypurchasedpropertiesFluctuationsinCO2emissionsarealsoinfluencedbythevariousenergysourcesusedinthepropertiestoproduceelectricityheatandcooling

Emissionspertypeofuseperyear

AbsoluteCO2emissions(tCO2eyearextrapolatedportfolio)

Emissionsbytypeofuseperyear


2017

4

17

39

40

2019

4

15

42

39

2018

4

15

38

43

434918 434744 450307

2017

173633

2018

185425

2019

177266


2017

170665

2018

165425

2019

187728

Retail buildings

2017

72862

2018

67372

2019

68563

Hotel buildings

2017

17758

2018

16522

2019

16749

Logistics buildings

153


Average emissions per year

bytypeofconsumption

SpecificCO2 emissions [kg CO2(msup2year)]G4-CRE3

Averageportfolioemissionspertypeofuseandyear

bytypeofconsumption

In2019specificCO2 emissions were somewhat higher than the threeshyyear average and at63kgCO2permsup2yearwereincreasedbyaround9(comparedwiththefiguresfrom2018)Theincreasewasduetonewlypurchasedorsoldpropertiesaswellastheenergysourcesused

CO2 emissions electricity [kgCO2e(m2year)] CO2 emissions heating [kgCO2e(m2year)] Portfolioaverageoverthreeyears[kgCO2e(m2year)]

2017

74

26

2019

77

23

2018

74

26

56 58 63

59 59

65 67

35 33

2017 2018 2019


2017

66

2018

65

2019

72

Retail buildings

2017

78

2018

76

2019

77

Hotel buildings

2017

21

2018

20

2019

21

Logistics buildings

68

82

69

7632

18

31

24

85

67

78

85

67

79

15

33

2215

33

21

51 52 56

154


AbsolutewaterconsumptioncomprisesthetotalvolumeofwaterconsumedThesourcesofsupplyincludedaredrinkingwaterraingroundwaterandsurfacewaterComparedwith2017thewaterfootprintfortheoverallportfoliodecreasedbyaround25toafigureofroughly44millionmsup3in2019Ananalysisoftheindividualtypesofuseshowsasignificantdeclineofnearly18inthecaseofhotelbuildingsinparticularwhereasothertypesofusemovedonlyslightlyupordown

Shareofconsumptionpertypeofuseperyear

Absolutewaterconsumption(msup3yearextrapolatedportfolio)



2017

1

30

38

37

2019

1

26

42

32

2018

1

30

38

31

4518574 4506013 4403141

2017

1386013

2018

1382160

2019

1416601


2017

1732593

2018

1727777

2019

1829872

Retail buildings

2017

1363573

2018

1359782

2019

1123207

Hotel buildings

2017

36395

2018

36294

2019

33462

Logistics buildings

303-1

155


Average consumption per year

Specificwaterconsumption[msup2(msup2year)]

Averageconsumptionpertypeofuseandyear

SpecificwaterconsumptionistheabsolutevalueadjustedforspecialusersAt056msup3msup2in2019theaveragewaterconsumptionoftheoverallportfolioremainedvirtuallyunchangedatthethree-yearportfolioaverage

AnanalysisofthedifferenttypesofuseclearlyshowsthattherewereonlyminorfluctuationsheretoowhicharestandardfortheportfolioDuetothetypeofuseconsumptionishighestinhotelsandlowestinlogisticsbuildings

Specificwaterconsumption[msup2(msup2year)] Portfolioaverageoverthreeyears[msup3(msup2year)]

2017 20192018

057 057 056057

2017 2018 2019 2017

067

2018

065

2019

063

2017

146

2018

144

2019

140

2017

004

2018

004

2019

004

039 039 040

057

Office buildingsTotal portfolio Retail buildings Hotel buildings Logistics buildings

156


TheabsolutevolumeofwasteisthetotalquantityofwasteproducedinthecategoriesofrecyshycledwastelandfillwasteandincineratedwasteIn2019theabsolutevolumeofwasteforthetotalportfoliowas54186tonnesuparound34onthepreviousyearThisincreaseisduetopurchasesofofficeandlogisticspropertiesin2019

Shareofwastevolumefortypeofuseperyear

Absolutevolumeofwastendash(tyearextrapolatedportfolio)

Wastevolumepertypeofuseandyear


2017

11

16

40

34

2019

11

13

39

37

2018

11

16

40

33

52380 52365 54186

2017

17587

2018

17782

2019

19808

2017

20893

2018

22515

2019

21075

2017

8253

2018

8141

2019

7104

2017

5647

2018

5749

2019

6199


157


Wasteunspecified[kgmsup2] Wastelandfill[kgmsup2] Wasteincinerated[kgmsup2] Wasterecycled[kgmsup2] Portfolioaverageoverthreeyears[kgmsup2]

Specificvolumeofwaste[kg(msup2year)

67 67

ThespecificvolumeofwasteisadjustedforspecialusesComparedwith2017thespecificvolumeofwasteforthetotalportfolioincreasedby04in2019andwasthereforejustabovewiththethree-yearportfolioaverage

Average waste volume Averagewastevolumepertypeofuseandyear

2017

54

17

16

13

2019

60

49

11 14

1424

15 13

2018

59

15

14

12

66 65 70

2017

50

2018

51

2019

56

2017

81

2018

80

2019

83

2017

88

2018

74

2019

85

2017

67

2018

70

2019

77

5658

59

13 1323

19 17 10

12 12 16

6057

35

39 59

77 8079

23

14

15

183

5 41

11

13

18

19 13

7 67

715

3224 25

11 10 13


158


5636 Like-for-likeportfolioLike-for-likeisametricthatadjuststhedevelopmentinanindicatorfornewacquisitionsordisposalsThisisprimarilyusedindynamicmarketstoallowcomparisonsofgrowthfactorsinthiscaseconsumptionvaluesThelike-for-likeanalysisoftheUnionInvestmentrealestateportfoliothereforeonlyincludespropertiesthatwereintheportfolioinboth2018and2019andforwhichthereisquality-assuredconsumptiondataforbothoftheseyearsTheadjustedanalysisallowsspecificstatementstobemadeonthechangesinconsumptionvalueswithintherealestateportfolioMeasuresthathavecontributedtothereductionintherespectivetypesofconsumptioncanthusbetrackedandmonitoredAdisadvantageofthismethodisthatstatementsonlyapplytoaportionoftheportfolioratherthantotheportfolioasawholeThelike-for-likeportfoliocovers263propertiesorapprox69ofthetotalportfolio

Like-for-likePortfolio

Type of use 20182019

Numberofproperties Floorareainmsup2 Floorareain

Office buildings 158 3462863 51

Retail buildings 59 2342344 34

Hotel buildings 40 714599 10

Logistics buildings 6 332812 5

Total 263 6852618 100

Thedevelopmentofthelike-for-likeconsumptiondatafrom2018to2019showsadecreaseinfinalenergyof05CO2emissionswerereducedbyapproximately2Waterconsumptionremainedthesameyear-on-yearbutisstilljustbelowtheportfolioaverageofthelastthreeyearsThespecificvolumeofwasteincreasedslightly

Specificfinalenergyconsumption like-for-like[kWh(msup2year)]Averagelike-for-likeportfolioconsumption peryearbytypeofconsumption

SpecificCO2 emissions like-for-like[kgCO2e(msup2year)]Average emissions per year bytypeofconsumption


CO2 emissions electricity [kgCO2e(msup2year)] CO2 emissions heating [kgCO2e(msup2year)] Portfolioaverageoverthreeyears

[kg CO2e(msup2year)]

2018 2018

64

71

3629

2019 2019

65

71

3529

228 560227 550227 590

159


Specificwaterconsumption like-for-like[msup3(msup2year)]Average consumption per year

Specificvolumeofwaste like-for-like[kg(msup2year)]Average waste volume

Specificwaterconsumption[msup2(msup2year)] Portfolioaverageoverthreeyears [msup3(msup2year)]


2018 2018

54

18

15

15

2019 2019

53

18

16

13

056 66056 67057 67

564 German Property Federation- and German Investment Funds Association-compliant sustainability reporting

InthisreportUnionInvestmentfollowsthesustainabilitycodeoftheGermanInvestmentFundsAssociationTheGermanPropertyFederationcodeencompassesanindustrycodetogetherwithstipulationscoveringindustryreportingsustainabilitymeasurementcorporategovernanceresponsibilityandcorporatesocialresponsibility

ForinternalbenchmarkingUnionInvestmentalsousestheGermanPropertyFederationguidelineldquoSustainabilityBenchmarkingndashWhatandHowShouldComparisonsbeMaderdquo

InrespecttosustainabilityreportingUnionInvestmentalsocomplieswiththeldquoGuidelinesforSustainableRealEstatePortfolioManagementrdquopublishedbytheGermanInvestmentFundsAssociation

160


61 HR strategy

AsaresponsiblecompanyweofferouremployeesindividualandextensiveopportunitiesfordevelopmentwithourHRpolicyaimedatlong-termstabilityandourmodernHRstrategyBecause we know that our employees arethebasisforoursuccesswecreatearespectfulworkingenvironmentinwhichtheycanbebothprofessionalsandpeople

Ourcorporatecultureischaracterisedbyourcooperativevaluessuchastransparencypartnershyshipandprofessionalism

ThesatisfactionandcommitmentofouremployeesisgaugedeverytwoyearsviaastructuredandanonymousonlinesurveyofallemployeestheUnionInvestmentclimatebarometerTheobjectiveistoidentifywhatemployeesthinkoftheclimateatUnionInvestmentinawaythatpinpointstheirsatisfactionwithvariousaspectsoftheirworkandmakestheiridentificationwiththecompanyrsquosvaluesandgoalstransparentTheOrganisationalCommitmentIndex(OCI)whichdemonstratesthecommitmentofouremployeestotheorganisationhasbeenstableataveryhighlevelforanumberofyears

EveryotheryearalternatingwiththeclimatebarometerthereisthemanagerfeedbackprocessItspurposeistoreviewandimplementthestandardsdefinedinthemanagementguidelinesThesestandardswerejointlydevisedbytheBoardofManagingDirectorsandmanagersanddescribehowgoodmanagementistobelivedoutatUnionInvestmentMeasuresaresystematicallyderivedfromtheclimatebarometerandmanagementfeedbackformatsandimplemented

404-3

62 Employee structure

6 Employees

Permanent Temporary Total

Male 1796 145 1941

Female 1362 125 1487

Total 3158 270 3428

Full-time Part-time Total

Male 1729 212 1941

Female 822 665 1487

Total 2551 877 3428

Newhiresbyagegroupandgender

lt 30 30 ndash 50 gt 50 Total

Male 43 67 20 130

Female 30 40 8 78

Total 73 107 28 208

Numberofresignationsbyagegroupandgender


Male 6 35 10 51

Female 10 23 2 35

Total 16 58 12 86

Totalturnoverratebyagegroupandgender


Male 280 304 174 263

Female 498 251 054 235

Total 386 280 127 251

102-8

401-1

401-1

401-1

161


63 Occupational safety health management and work-life balance

Weenhanceandmaintainouremployeesrsquoefficiencyandmotivationonthebasisofstrategichealth-caremanagementUnionInvestmentprovidesnumerouspreventioninterventionandrehabilitationmeasuresandinstruments

ItisnotmerelylipserviceforUnionInvestmenttoofferitsemployeesoptimumlabourconditionsbutmoreoveranimportantaimandpartofouremployee-orientedandsustainableHRstrategyWeaimtoachieveanoptimumbalancebetweencareerandprivatelifeaswellasbetweentheinterestsoftheemployeesandthecompanyrsquosobjectivesTothisendweofferouremployeesaplethoraofsupportforms

IncreasingprofessionalandprivatestressandlongerlifeworkingtimerequireparticularattentioninrespecttothehealthofouremployeesWithourstrategichealthmanagementwewanttoretainperformancelevelsandmotivationofouremployeesbypromotingandsupportingindependentactivity

In the reporting year thesicknessratewas32amongmenand54amongwomenAsafinancialserviceprovideraccidentsareusuallylimitedtominorinjuriesinday-to-dayofficeworkandaccidentswhilecommutingAccordinglytherearenooccupationswithaparticularlyhighdiseaseorhealthriskwithinthecompany

64 Training and education

Weareverykeentogiveouremployeestargetedhelpwiththeirprofessionalpersonalandmethodologicaldevelopmentpreparethemforfuturechallengesandsecuretheiremploy-abilityandthusthefutureviabilityoftheorganisationTothisendweprovideawiderangeofeducationandtrainingopportunitiesOurHRdevelopmentisgearedtowardsthreecentralprincipleshereInthecontextofrequirementsorientationweassistemployeeswithregardtotheircurrenttasksBycontrastinthecontextofpotentialorientationwehighlightfutureopportunitiesInadditionwepromoteinternalemployabilityietheversatilityofour employeeswithintheorganisation

403-2

403-3

HRdevelopmentisbasedonamultidimensionalapproachatUnionInvestment

1 Needs-drivendevelopment(adjustingorupgradingfordirectworkplacerequirements)2 Potentialdevelopment(qualificationforfuturerequirementsortakingonfurtherfunctions)3 Promotinginternalemployability(graspofprocessesandconnectionswithregardto

diverseemployability)

Varioustargetgroup-specificprogrammesandinstrumentsareusedKnowledgemanagementsystemsarealsousedinvariousorganisationalunitsNotransitionalaidprogrammestofacilitatefurtheremployabilityortohandleacareerexitduetoretirementorterminationofemploymentareoffered

Tofaceuptodemographicchangewehavebeenincreasinglyinvestinginourjuniorstaff(apprenticestraineesandgraduates)foryearsWeproviderigoroustraining(withintegratedstudies)intwodifferentcareersandamanagementtraineeprogrammeforuniversitygraduatesinvariousdisciplinesThetopicofldquosuccessionplanningrdquoisacorepartofourtalentmanagementapproach

Inthereportingyeartimespentontrainingandeducationwassignificantlycurtailedbythecoronaviruspandemicastheabilitytoholdface-to-facesessionswasrestricted

Averagehoursoftrainingperyearperemployee

Training and education Hoursyear

Trainingofheadsofdivision 224

Trainingofheadsofdepartment 179

Trainingofgroupmanagers 174

Trainingofemployees 166

404-1

404-2

162


65 Diversity

UnionInvestmentlooksfordiverseteamsregardlessofculturalbackgroundnationalityethnicitygendersexualorientationphysicalabilityreligionorageWewanttoacquirepromoteandretainthemostsuitableemployeesThiscreatesopportunitiesforinnovationcreativityandgrowth

Weprovideanopen-mindedworkingenvironmentofcooperationinwhichpeoplecandeveloptotheirfullpotentialDiversityandappreciationofdifferencesfosterrelationshipswithourcustomersandpartnersandstrengthenthesocietyinwhichweoperateWithourdiversity management concept we ensure that diversity is permanently enshrined in our corporatecultureWealsomadeapubliccommitmenttotheprincipleofequalopportunitybysigningtheDiversityCharterin2011BecausewebelievethatmixedteamsaremoresuccessfulitisourexplicitgoaltocontinuouslyincreasetheproportionoffemalemanagersandexpertsThecontinuousparticipationintheldquoTop4Womenrdquocertificationsince2016offersUnionInvestmentagoodopportunitytohavecurrentandplannedmeasuresforthepromoshytionofwomenrsquoscareersevaluatedbyanindependentassessor

66 Remuneration policy

Theaimoftheremunerationsystems is to recognise the employeesrsquo achievements accordingly andtoofferthemeffectiveperformanceincentivesTheremunerationsystemforemployeesinthecollectivelynegotiatedwagesectorinGermanyisbasedonthewageagreementsfortheprivatebankingindustryandforpublicbanksInLuxembourgitisbasedonthecollectivebargainingsystemapplicablethereNodistinctionismadebetweenfull-timeandpart-timeemployeeswhenitcomestobenefits

The agreed salariescomprisethemonthlysalariesandbonuspayments308ofouremployshyeesarepaidcollectivelynegotiatedwages

Theremunerationstructureforemployeesnotinthecollectivelynegotiatedwagesectorcomprisesafunction-basedmonthlybasicsalaryandashort-termperformance-basedcomponentTheperformance-basedcomponentcomprisesnotonlyquantitativetargetsndashqualitativeandsustainabletargetscanalsobeagreedindividuallyAresults-orientedbonusandagrowth-orientedlong-termincentiveplan(LTIP)maybeofferedasvoluntaryspecialbenefitsAnLTIPoffersanincentiveforsustainablebusinesssuccessandforlong-termstaffretentionandalsoreflectsthecompanyrsquosriskposition

Theremunerationstructureforemployeeswhoseactivitieshaveasignificantinfluenceontheriskprofileoftheassetmanagementcompanyorthemanagedinvestmentfund(riskfunctions)andforemployeeswithacontrolfunctioncomprisesbasicremunerationandvariableriskremunerationpremiumforriskfunctionsThisvariableremunerationentailsamulti-yearassessmentperiodanddelayedpaymentTheaimistoreducetheriskappetite oftheriskfunctionsbyincorporatinglengthyperiodsofassessmentandpaymentintoboththepastandfutureTheremunerationsystemisalsocompatiblewithandbeneficialtoasoundandeffectiveriskmanagementsystem

Thedifferentpaysystemsforcollectivebargainingandnon-collectivebargainingarethesameforallemployeegroupsatalllocationsregardlessofagegenderorotherdiversificationsTherecanbeslightdifferencesinthebasicsalaryofmenandwomendependingonemployeegroupbutsomesalariesareatthesamelevelThereisnodiscerniblesignificantdifferencebetweenthesexesintermsofbasicsalariesorannualpayadjustments

InadditiontobasicremunerationtheboardmembersofUnionAssetManagementHoldingAGarepaidonthebasisofatargetbonussystemThebonuscomponentsarebrokendownintogroupcompanyandindividualtargets40ofthesearepaidintheformofadeferredbonusasasustainablecomponent

TheremunerationofthemembersoftheSupervisoryBoardofUnionAssetManagementHoldingAGasdeterminedbytheAnnualGeneralMeetingisfixedremunerationwhichisintentionallygrantedindependentlyoftheorganisationrsquosperformance

102-35

401-2

102-41

405-2

Employee diversity

lt 30 30 ndash 50 gt 50 Total Percentage

Male 214 1152 575 1941 566

Female 201 916 370 1487 434

Total 415 2068 945 3428 1000

Management diversity

lt 30 30 ndash 50 gt 50 Male Female

Percentage 0 64 36 84 16

405-1

405-1

163


Union Investmentrsquos remunerationsystemisbasedonananalyticaljobevaluationprocessdrawingonexternalremunerationbenchmarksIndependentexternaladvisoryservicesareusedbothininternalandannualmarketanalysisTheremunerationsystemisalsoexaminedandanalysedannuallybyanindependentinternalremunerationcommitteeResolutionrecommendationsareusuallyaddressedtotheSupervisoryBoardviatheBoardofManagingDirectorsNonethelessshareholdersandemployeesmayatanytimeaddressrecommendashytionsorinstructionsnotonlytotheBoardofManagingDirectorsbutalsodirectlytotheSupervisoryBoardNospecificmechanismhasbeenputinplaceforthis

Union InvestmentprovidesseveralcompanypensionschemesthatdifferintermsofcontribushytionsandimplementationmethodTheresultantliabilitiesaremostlyfundedviaplanassetsNoseparatefundhasbeencreatedspecificallyforourpensionobligationsSeep74oftheannualreportfortheamountofUnionInvestmentrsquoscompanypensionliabilities

Allpermanentemployeesareinatleastonepensionscheme

102-36

102-21

201-3

164


71 Management approach to climate protection As an asset manager our climateshyrelevant impacts at company level are limited compared withcompaniesinthemanufacturingsectorThematerialityanalysisconfirmsthattheldquoenvironmentrdquoareaofactivitywithinthecompanyisimportanttobothUnionInvestmentandourstakeholdersbutotherareasofactivityaremorerelevantThepubliclydiscussedtopicofldquoclimateprotectionrdquoisakeyaspectforourstakeholdersintheldquoenvironmentrdquoareaofactivity

Withthelsquo2degsindmachbarrsquo(Twodegreesareachievable) climate strategy adopted at the end of2015weshowitisaseriousmatterforusasacompanytomakeourcontributiontotheclimatetargetadoptedattheUNClimateChangeConferenceattheendof2015Ourcurrentclimate strategy is aimed at reducing our companyrsquos greenhouse gas emissions in line with currentbenchmarksby40by2030and85by2050comparedwith2009ineachcaseThistargetwhichwasinlinewithpolicywhenitwassetiscurrentlybeingreviewedinthelightofnewdevelopmentsInviewofthecurrentregulatorychangesthemanagementmechanismsforclimaterisksinlinewiththeTaskForceonClimate-relatedFinancialDisclosuresrequirementsarebeingexaminedanditisplannedtoimplementtheminoperatingprocesses inthenearfuture

72 Climate strategy Theissuesofclimatechangeandglobalwarmingareconnectedtokeyrisksforsocietyandbusiness

InlinewiththishighlevelofimportanceUnionInvestmentadopteditsownclimatestrategybackin2015Theobjectiveofthelsquo2degsindmachbarrsquoclimatestrategyistocontinuouslyreduceUnionInvestmentrsquosCO2emissionsalongadefinedpathachievingan85reductionagainstthebaseyearof2009by2050TheCO2savingsachievedinrecentyearshaveprovedtobemuchlargerthanexpectedInthereportingperiodthecoronaviruspandemicresultedinverysignificantadditionalsavingsinCO2emissionsdueinparticulartoworkingfromhomeandthesharpdeclineinbusinesstripsEmissionswerethusreducedbynearly50year-on-year

73 Environmental management system As the materiality analysis shows it is important to Union Investmentrsquos stakeholders that the impactsofourbusinessoperationsontheenvironmentaresystematicallyrecordedandoptishymisedThatiswhytheenvironmentalmanagementsystemisakeyaspectintheldquoenvironmentrdquoareaofactivity

WepublishthekeyfiguresonourcompanyrsquosenvironmentalimpactsrecordedviatheenvironshymentalmanagementsysteminourannualreportandCSRreporteachyearThedataisgatheredonadecentralisedbasisbyspecialistdepartmentsandconsolidatedinEnvironmentalManagementTheenvironmentalmanagementofficerandhisdeputymanagetheenvironshymentalmanagementsystemcertifiedinaccordancewithISO14001andensureitscontinuousenhancementFortherealestateportfoliosinourinvestmentfundsthatareparticularlyaffectedbyenvironmentalissuesthereisspecialenvironment-orientedbuildingmanagementgearedtowardsinternationalstandardsTheenvironmentaldataispublishedinlinewiththeGermanyrsquosleadingcodefortherealestateindustrytheGermanPropertyFederationcode

UnionInvestmentrsquosenvironmentaltargetsandmeasuresaremanagedviathesustainabilityprogrammeandreporteddirectlytotheBoardofManagingDirectorsofUnionAssetManagementHoldingAGaspartofanannualmanagementreview

Our environmental management thrives on the involvement of all employees

UnionInvestmentrsquosemployeesundergoskills-basedtrainingonoperationalenvironmentalprotectiononjoiningthecompanyInadditionoccasionalseminarsareheldonsustainabilityissuesTheycanbeusedasatrainingmeasureonavoluntarybasisWithaknowledgedatabaseavailableintheintranetinformationonrelevantguidelinesisavailabletoemployeesatanytime

7 Environmental responsibility

201-2

165


74 Consumption of resources AspectsofenvironmentalperformancesuchasreductionofenergyconsumptionvolumesofwasteorCO2emissionsarecontinuouslyimprovedthroughregularemployeetraininginternalauditsandsupplierdevelopmentmeetings

Byreviewingandenhancingthebuildingstrategytakingaccountoffuturespacerequirementsinlightofmobileworkinganddesksharingandimplementingtheworkplaceconceptatfurtherlocationstherequirementfornewofficespaceandthusadditionalenergyconsumptionistobereducedasfaraspossible

ThemanagementandmonitoringofCO2emissionsinrelationtomobilityistobeimprovedbyestablishingaCO2calculator

TheKPIsaredocumentedandcalculatedannuallyinthesustainabilityplatformSofionthebasisofconsumptionbillsandreportsfromsuppliersIfnoKPIsareavailabletheyareextrapolatedonthebasisofpreviousyearsorlevelsatotherlocations

ForsomeKPIs(egcommuteremissionsoreventemissions)itisnecessarytomakeassumptionsthatareusuallyderivedfromcurrentrecommendations(egfromtheEnvironmentMinistryNGOsVfU)ordeterminedininternalworkshopsonthebasisofexperienceTheassumptionsarealsodocumentedintherecordingtool

UnionInvestmentusesdrinkingwaterexclusivelyfromthecommunalwatersupplyinitsbuildingsandhencedischargeswastewaterintothecommunaldrainagesystemsWaterandwastewatervolumesarebasedontheutilitybillsIfthesearenotavailableforthecurrentreportingyeartheyareextrapolatedonthebasisofemployeedevelopmentUnionInvestmentdischargeswastewaterintothecommunaldrainagesystems

Paper consumption in kg 2019 2020 2020 share in

Recycled paper 143576 66607 131

FSC-certifiedpaper 654426 443036 869

PEFC-certifiedpaper 0 00

Non-certifiedpaper 0 00

Total paper consumption 798002 509643 1000

Paper consumption per customer [g] 1731 1066

Paperconsumptionincludesthefollowingtypesofconsumptioncustomermailphotocopyingpapercustomerinformation(magazinesflyersproductbrochures)reportsofficesupplies(stationerybusinesscardsletterheads)andhygienictissuepaperAllprintjobsandpaperordersarerecordedinthecompanyrsquosprocurementportalThisformsthebasisforcalculatingpaperquantitiesReportsfromthecleaningserviceproviderareappliedforhygienictissuepaperconsumption

301-1301-2

302-1302-3 2018 2020

Type of energy

Consumption in MJ

Consumption per employee

[MJFTE2]

Consumption in MJ

Reduction versus reference

year in MJ


[MJFTE2]

Petrol 186709 64 358724 -172014 11457

Diesel 21343447 7332 18063715 3279732 576931

Naturalgas 13338587 4582 14383066 -1044479 459376

District heating 11208983 3851 10609772 599211 338862

Electricity 35520015 12202 31520221 3999794 1006714

Total 81597741 28030 74935498 6662243 2393341

1 FTE=full-timeequivalent

TheKPIsarecalculatedonthebasisoftheutilitybillsandthereportonthevehiclefleetMissingdataforindividuallocationsisextrapolatedonthebasisofemployeedevelopmentDirectenergyconsumptionrelatestonon-renewablesourcesApartfromasmallproportionofsharedelectricityonlygreenelectricityispurchasedEmissionsfornaturalgasarecompensatedbytheenergysupplierviaaGoldStandard-certifiedclimate-protectionprojectTheenergyintensityratioisbasedonenergyconsumptionwithintheorganisationThereferenceyear2018wasselectedonaccountofthetargetagreementinthesustainabilityprogrammeseep172

Totalwaterwithdrawalandwaterdischargebysource(msup3)

2019 2020

Waterwithdrawal 34621 34029

Waterdischarge 34621 34029

Waterwithdrawalperemployee 113 109

306-1303-1

302-4

166


Totaldirectindirectandothergreenhousegasemissions(GHGemissions)byweight(tCO2 equivalents)1reductioncomparedwithreferenceyear2009andGHGemissionsintensity ComparativevalueScope2emissionsbasedontheenergymixinGermanysup2

Unfortunatelyoursuppliersarenotcurrentlyabletoreportontheirproduct-relatedorservice-relatedenergyconsumptionorCO2footprintWecontinuouslyimprovetheirenvironshymentalperformancethroughsupplierdevelopmentmeetings

302-2

2009 2020 Reduction versus reference year

Source of GHG emissions

CO2 in tonnes

CO2 in tonnes

Percentage []

Emissions per employee

[kgFTE]

CO2 in tonnes

Reduction []

Vehiclefleet(fuelconsumption)

29922 20599 279 6579 9323 3116

Naturalgas 16052 3242 44 1035 12810 7980

Coolant losses 00 584 08 187 -584 shy

District heating 1486 4802 65 1534 -3316 -22317

Electricity consumption

69298 4627 63 1478 64671 9332

Paper consumption

13851 5574 76 1780 8277 5976

Business travel (railrentalcarsaircraftprivatecars)

36213 8297 112 2650 27916 7709

Watersupply 194 226 03 72 -32 -1631

Hotel accommodation

684 1454 20 464 -770 -11254

Commutertraffic 21389 7495 102 2394 13894 6496

Workingfromhome

0 1280 17 409 -1280 shy

Letters 6217 28 00 09 6189 9956

Parcels 1164 00 00 00 1164 10000

Waste 1156 1311 18 419 -155 -1339

Events 35671 14154 192 4521 21517 6032

Toner consumption

507 120 02 38 387 7624

Total 233806 73793 1000 23569 160013 6844

1 ForallGHGemissionsourcesthecarbonfootprintalsocontainstheupstreamanddownstreamScope3emissions(CDPstandardGHGmarket-basedmethod)2009wasappliedasthereferenceyearbecausethiswastheyearinwhichtheenvironmentalmanagementsystemwasintroducedmeaningitprovidesthebestpossibletransparencywithregardtothemeasuresalreadyimplementedThecarbonfootprintiscalculatedonthebasisofutilitybillsandreportsfromserviceprovidersManufacturerinformationwasappliedfortheemissionfactorswherepossibleWherethisinformationwasnotavailablethefactorspublishedbytheVfUwereappliedWetaketheRFIfactor27intoaccountwhendeterminingbusiness-travelemissionsforaircraft



CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


692985 453541 144855 239444 3455

Total sup2 2338060 1145200 365762 1192860 5102

2 Showstheemissionsfromelectricityconsumption(GHGlocation-basedmethod)wherethiswasnotpurchasedasrenewableenergy

305-1305-2305-3305-4305-5

305-5

Totalweightofwastebytypeanddisposalmethod1

Type of waste 2019 2020

Paperwaste(t) 4095 1229

Mixedpackaging(t) 131 62

Biologicalwaste(t) 157 51

Glasswaste(t) 26 28

Residualwaste(t) 1528 877

Other

Lighting(kg) 550 2490

Oldbatteries(kg) 400 440

Commercialwaste(t) 179280 180420

Datacarriers(kg) 13260 43000

Electricalwaste(kg) 8050 4664

Tonerwaste(kg) 10730 4029

1 VolumesofwastearecalculatedonthebasisofreportsordisposalcertificatesviathewasteregisterIntherarecaseswherewastedataisnotavailableegwherecollectioncontainersaresharedwithothertenantsthedataisextrapolatedonthebasisofthenumberofemployeesattherespectivelocationOurwastedisposalcompaniesareresponsibleforselectingthedisposalmethodTonerwasteisreturnedtotheserviceproviderofourprintingserviceprovider

306-2

167


Environmentalimpactsoftransportndashbusinesstripsandlogistics

Means of transport [km]1 2019 2020

Flight 10367201 2151090

Cars 1224621 447442

Rail 5199039 1448478

Total distance 16790861 4047010

Distance per employee 5500 1293

Deliveriessup2 2019 2020

LetterssentwithinGermany(quantity) 29929387 27328803

LetterssentwithinEuropeworld(quantity) 184045 202450

Parcelssent(quantity) 54518 33976

1 TheKPIsarecalculatedonthebasisofthetravelexpensereportandreportsfromserviceprovidersThefiguresdonotincludethedistancestravelledusingcompanycarsasthesearealsousedprivatelyandalreadyconsideredextensivelyin301-2

2 ThedeliveryquantitiesaretakenfromreportsfromserviceprovidersDeliveryismadeiftheserviceprovideroffersitasaclimate-neutralservice

168


8 Social responsibility

81 Human rights

Humanrights-relatedimpactsandrisksarecomingintosharperfocusTheexpectationsoflegislatorsaswellascivilsocietyinvestorsandconsumersaregrowing

WiththeEU Taxonomy Regulationandthepoliticaldebatesoverhumanrightsduediligence(egsupplychainlaw)companieswillincreasinglyhavetodisclosetheirperformancewithregardtohumanrightsAlthoughimportantregulatoryrequirementshavenotbeenfullydevelopedyetthiswillgraduallyfollowintheyearstocomeThePrinciplesforResponsibleInvestment(PRI)initiativehasputforwardaproposalforhowassetmanagersshouldcarryouthumanrightsduediligenceinthefutureandreservestherighttoimposecorrespondingrequirementsonPRIsignatoriessuchasUnionInvestmentwithinthenextfiveyearsInadditionquantitativeindicatorstargetsandimplementationstrategieswithregardtohumanrightscouldbecomeincreasinglyrelevant

AgainstthisbackdropwecarriedoutaninternalhumanrightsanalysisatUnionInvestmentinsummer2020Thispilotstudyshowedwherehumanrights-relatedimpactsexistwhichduediligenceobligationshavealreadybeenmetandwherewecanimproveForthisevaluationweconductedinterviewswiththerelevantexpertsfromRealEstatePortfolioManagementComplianceGroupHRtheWorksCouncilCorporateCommunicationsInvestmentAnalysisandControllingandPurchasing

Withregardtotheresultswehavetodrawadistinctionbetweenevaluatinghumanrights-reshylatedrisksasanassetmanagerorasanemployerAsanemployerinterviewpartnersprioritisedhumanrights-relatedriskswithregardtoworkersrsquorightsdiscriminationandcorruptionIntheAssetManagementdivisiontheissuesofworkersrsquorightsoccupationalsafetycorruptionmoneylaunderinglifeandhealthandtraditionallifestyleswerecited

TheanalysisalsoshowedthatmanyareasofUnionInvestmentarealreadyimplementingalargenumberofriskanalysesguidelinesandduediligenceprocessesthatentailhumanrightsaspectsAsdecidedbytheSustainabilitySteeringCommitteethetargetfor2021topoolexistingapproachesinameaningfulmannerandtoenhancethemwherenecessaryTothisendwehaveadoptedapackageofmeasuresthatwewillworkontogetherwithrelevantsegmentsandareasoverthecourseoftheyear

82 Anti-corruption and compliance

TheUnionInvestmentGrouphasestablishedvariousrulesproceduresandprinciplesinordertopreventviolationsofthelawandconflictsofinterestandtolimitresultingrisksasfaraspossibleInourviewthecurrentpreventivemeasuresofferareasonabledegreeofpreventionbeforeactionneedstobetaken

All our operations are assessedwithregardtocorruptionrisksAllemployeesandmanagersareinformedofandtrainedinstrategiesandmeasurestocombatcorruptionTheseareinternal guidelines andprocesseswhicharenotcommunicatedexternally

VariousguidelinesandprocessesareestablishedforinternalandexternalmechanismsforseekingadviceonethicalandlawfulbehaviourandmattersrelatedtoorganisationalintegrityTherearewhistle-blowingsystemsthattracktherelevantspecificmatterswhichinparticularguaranteethewhistle-blowerrsquosanonymityIfnecessaryexternalbodiesadvisorsarealsoinvolvedinordertohandledrafttherelevantsituation

Themoneylaunderingofficerwasnotmadeawareofanyincidencesof corruption in the 2020 reporting period which would have resulted in judicial sentencing or an employee dismissalThisequallyappliestoanycontractswithbusinesspartnersfoundedonsuchamatterThemoneylaunderingofficerislikewisenotawareofanypubliclawsuitslevelledatthegroupinconnectionwithincidencesofcorruptionInthereportingyeartherewerealsonolegalactionsforanti-competitivebehaviouranti-trustandmonopolypractices

UnionInvestmentrsquosfundamentalaimistoavoidpotentialconflictsofinterestandifthisisnotpossibletoascertainresolveandmonitortheseconflictsofinterestwithappropriatemeasuresthatkeepthenegativeimpactoncustomersataminimumorresolveitfairlywhileprotectingcustomersrsquointerestandcreatethenecessarytransparencyforcustomers

In2020anemployeeofUnionInvestmentwasaccusedofhavingconductedprohibitedinsider trading in private accounts outside the companyrsquos system and thus making a considershyableamountofmoneyunlawfully(frontrunning)TosupporttheinvestigationsUnionInvestmentwasinconstantdialoguewiththeinvestigatingpublicprosecutorandthefinancialsupervisoryauthorityBaFinThecaseshowedthatthesupervisorysecuritysystemswiththefoursidesofcustodianbanksBaFininvestigatingauthoritiesandinvestmentcompaniesfunctionverywell

AccordingtothefindingsofaninternalandaspeciallycommissionedreviewbyanexternalauditfirmneithercustomersnorinvestmentfundsofUnionInvestmentsuffereddamage

205-1

205-2

102-17

205-3

206-1

169


Inordertocountersuchrisksbetterinthefutureouremployeesrsquoawarenessofrulesregardingpersonaltradingandtheprohibitionofinsidertradingwasraisedinatargetedmannerinaddition to the regular training measures and the relevant training compliance controls andmonitoringmechanismswereintensified

InexternalbusinessrelationshipsitislikewisetheaimtopreventtheemergenceofconflictsofinteresttocustomersrsquodisadvantageTothisendwehavedevelopedaninternalconflictofinterestpolicythatprovidesforawiderangeoforganisationandadministrativemeasuresTherewerenoconflictofinterestsituationsin2020

170


ThesustainabilityrequirementsforsuppliersoftheDZBANKGroupapplytoallsuppliersoftheUnionInvestmentGroupTherequirementsareformulatedonthebasisoftheprinciplesoftheUNGlobalCompactAdditionalspecificsupplierstandardsarealsoagreedincontractswhererequireddependingontheperformancerelationshiporscopeofsupplyThesustain-abilityrequirementscoverthethreeareasofeconomicresponsibilityenvironmentalresponsishybilityandsocialresponsibilityCompliancewiththelawisexpectedasaminimumrequirement

AsaresponsiblecompanyUnionInvestment has integrated responsibleprocurementintoitsbusinessprocessesAspartoftheorderingprocessessupplierspromisetocomplywithourstandardsbysigningoursustainabilityrequirementsCompliancewiththesustainabilityrequirementsissupportedbyself-disclosureandifnecessarybyduediligenceintheformofasupplierdevelopmentmeetingInthereportingyearallnewsupplierssignedoursustainabilitypromiseAround500supplierswereassessedintermsofenvironmentalandsocialimpactinthereportingperiod

Union Investment is keentocontinuouslyimprovethesocialandenvironmentalperformanceoftheselectedsuppliersInthecontextofarelevancecheckweselectthebusinesspartnerswehaveinmindforsuppliermeetingsThisselectionisbasedonthesuppliersrsquoimpactontheenvironmentandsocietyMeasurestoimprovesocialandenvironmentalperformancearejointlydefinedandimplementedinregularsuppliermeetingsOperationalmeasuresandchecksoftheirefficiencyaredocumentedandtrackedbyUnionInvestmentrsquosSupplierManageshymentemployeesRegularinternalauditsassurethequalityofprocurementandsuppliermanagementprocessesandprocedures

Environmental responsibility in the supply chain

Environmentalresponsibilityobligessupplierstocomplywithlegalstandardsregardingenvironmental protection to minimise their negative environmental impact and to operate orestablishasystematicenvironmentalmanagementsystemembeddedintheirorganisation

In the reporting period40ofoursupplierswereidentifiedashavingapotentiallynegativeenvironmentalimpactNoviolationswerefoundhoweversonobusinessrelationshipswereterminatedorcorrectiveactionsagreedEcologicalenvironmentalimpactsmeasuredonthebasisofCO2footprintariseinthefollowingproductgroupsOutsourcingelectricityconsumpshytionofdata-centreserviceprovidersfacilitymanagementwastewatersupplydistrictheatingnaturalgaselectricityconsumptionmarketingpaperconsumptionevents(conferenceseventstradefairs)logisticspackagesmaildeliveriestravelmanagementbusinesstripshotelstaysoperatingandofficeequipmenttonerconsumptionvehiclefleetfuelconsumpshytionConsequentlywemaintainclosedialoguewithoursuppliersandhavedevisedadevelopshymentpathwaywiththem

308-1

414-1

102-9

308-2

Social responsibility in the supply chain

ThestandardsofsocialresponsibilityincluderecognitionofandcompliancewithhumanrightsonthebasisoftheUnitedNationsGeneralAssemblyrsquosUniversalDeclarationofHumanRights(UDHR)andtheEuropeanConventiononHumanRights(ECHR)nochildorforcedlabourpursuanttoInternationalLabourOrganization(ILO)Convention138(theminimumageshallnotbelessthantheageofcompletionofcompulsoryschoolingandinanycaseshallnotbelessthan15years)theguaranteeoffairpayandfairworkingconditionspursuanttoILOrsquoscorelabourstandardsfreedomofassociationandrighttocollectivebargainingoccupashytionalhealthandsafetyasminimumstandardspursuanttoILOrsquoscorelabourstandardsnon-discriminationandnon-corruption

Thespecificcharacteristicsofourindustrycombinedwiththefocusofthepurchasedgoodsandservicesmeansthatapartfromcateringcleaning and security services we do not use anyservicessupplierswithmaterialconnectionstothelow-wagesectororwithaconnecshytiontoethicallyorsociallycontroversialgoodsorpracticesInthereportingperiod40ofoursupplierswereidentifiedashavingapotentiallynegativesocialimpactNoviolationswerefoundhoweversonobusinessrelationshipswereterminatedorcorrectiveactionsagreed

Structure of the supply chain

FortheoperationmanagementandfurtherdevelopmentofinternalprocessesUnionInvestmentpurchasesgoodsandservicesinthefollowingproductgroupsconsultingoutsourcingservices(mainlyIToutsourcing)facilitymanagementmarketinginformationtechnologymarketdataevents(conferenceseventstradefairslogisticstravelmanageshymentoperatingandofficeequipmentandvehiclefleetInadditiontopriceandqualityPurchasingtakesthefollowingobjectivesintoaccountinitsdecision-making

a) Riskminimisation(egwithregardtosecurityofsupplydataprotectionperformanceefficiencycompliancereputationetc)

b) Sustainabilityimpactofpurchaseoftheservice

For the services relevant tothebusinessprocessesinparticular(especiallyoutsourcingofITservices)thesupplychains(ieincludingupstreamsuppliers)areexaminedonthebasisofregulatoryrequirementsandmonitoredintermsofthestipulationssetoutaboveOursupplierportfoliowithapprox1600activesuppliersandserviceprovidersinthereportingyearprimarilyconsistsofconsultantsdevelopersagenciesserviceprovidersproductioncompanies(media)trainersandothersOursuppliersaremostlylocatedinGermany(approx85)andtheEU(approx97)Approx3ofsuppliersarebasedoutsidetheEUThismainlyrelatestomarketdataandsoftwareproductswithforeignheadquartersofthemanufacturersTherewerenomaterialchangesinthesupplychaininthereportingyear

414-2

409-1

407-1

204-1

102-10

9 Supply chain responsibility

171


WithitssustainabilityprogrammeUnionInvestmentmanagesandmonitorsitsinternalsustainabilityactivitiesandobjectivesacrossallareasofCSRinvolvementandthusthecompany-wideandintegrateddevelopmentofthesustainabilityissueEachyeartogetherwithSustainabilityManagementattheUnionInvestmentGrouptheresponsibledepartmentschecktheimplementationlevelofthemeasuresandobjectivesofthesustainabilityprogrammeInconsultationwithSustainabilityManagementnewmeasuresmaybeaddedandapprovedbytheBoardofManagingDirectorsofUnionInvestmentThishasenabledustoensurethataconsistentlogicisinplaceformanagingsustainabilityissueswiththesupportofITsystemsandthatmatchingdatamaterialisavailableforallsustainabilityobjectivesandactivitiesAttheturnof20192020newmeasureswerenotagreedwiththeindividualcompanyunitsasusualThesustainabilityprogrammeandthedevelopmentandimplementationofthesustain-abilitystrategyaretobemorecloselyinterlinkedinthefutureFrom2020thereforenewsustainabilitymeasuresaretobeagreedfollowingthedevelopmentandadoptionofthestrategymidwaythroughtheyearandthenpublishedinthesubsequentCSRreport

10 Sustainability programme

Strategy organisation

Objectives and activities Timetable Status

Integrate new sustainability topics into company management (CSR)

2022

1 IntegrateESGdataintothedatawarehouse 2021 Extended

2 Developmethodsforrelativeandabsolutemeasurementoftheperformancecontributionofsustainableinvestment

2021 Extended

3 EstablishaCSRtrainingplatform 2021 Extended

4 Designampimplementasustainabilitycockpit 2022 New

Continue to develop sustainability management 2022

1 Continuetodevelopstakeholderanalysis 2022 New

2 Implementmeasuresforhumanrightsduediligence 2022 New

3 Revisethesustainabilitycode 2022 New

Communication


Expand systematic sustainability communication to relevant stakeholders

2022

1 Placesustainabilityasafocustopiconthehomepage oftheholdingcompanyrsquoswebsite

2021 New

2 Draftacommunicationplanforthetopicofsustainabletransformation

2021 New

3 Enhanceandbundlecommunicationactivitiesonthe topicofsustainabletransformation

2022 New

4 EstablishsustainabilityasamaterialcomponentofBoard ofManagingDirectorscommunication

2022 New

Standardise and strengthen UIGrsquos visibility with regard to sustainability

2022 New

172


Environment


Reduce per employee energy consumption of electricity gas and district heating by 5 by 2022 (reference year 2018)

2022

1 ImplementtheworkplaceconceptattheHamburgsite inordertoavoidtheneedfornewofficespaceandthus additional energy consumption

2022 New

2 Reviewandenhancethebuildingstrategytakingaccountoffuturespacerequirementsinlightofmobileworkinganddesk sharing

2021 New

3 ImplementthenewworkplaceconceptattheMainTor Porta site

2022 New

Reduce the CO2 emissions by 40 to 2030 (reference year 2009)

2022

1 Alignthevehiclefleetpolicytochangedgeneralconditions 2020 Completed

2 ImplementtheLuxembourgsitestrategy 2021 On schedule

3 Reducebusinesstripsby20bydigitalmeans 2025 New

4 Increasetheproportionofhybridvehiclesinthevehicle fleetto10

2025 New

5 EstablishaCO2calculatortomanageandmonitorofCO2 emissionsinrelationtomobility

2021 New

Reduce resources consumption and use on an ongoing basis

2022

1 Reduceresidualwastevolumesby25 (referenceyear2018)

2022 On schedule

2 Optimisebasketsforofficesuppliersandpromotional articlesinlinewithsocialenvironmentalaspects

2022 On schedule

3 Increaserecyclingshareforprintingby10 (referenceyear2018)

2022 On schedule

Employees


Retain and expand work satisfaction and ability to work

2022

1 Enhancesustainabilitytrainingaspartofthemasterplan 2022 New

2 Continueandexpandtheofferofhuman resources development measures on resilience healthymanagementmindfulnessetc

2021 New

Retaining employees 2022

1 Positioningasattractivesustainableemployee onthecareerpagesofUnionInvestment

2020 Completed

2 Implementaleadershipcurriculumforallmanagers 2023 New

Promote the balance between career and family 2022

1 Implementthemeasuresfromthere-audit consolidationldquoauditcareerampfamily2017rdquo

2020 Completed

2 ldquoDiversityampUnionrdquomeasurestopromotewomen inspecialistandmanagementfunctions

2022 On schedule

3 Implementadiversitycouncil 2021 New

173


Society


Further develop the social commitment of Union Investment

2022

1 Recyclepromotionalmaterialsincooperationwith aworkshopfordisabledpersons

2020 Completed

2 Consolidatedexpansionofthesupportfortraining andqualificationprogrammestopromoteequality ofopportunityonthelabourmarket

2020 Extended

3 Developandexpandtheinitiativesforfinancialeducation 2020 Extended

Promote sustainable and investor-oriented interests in the financial industry and regulation

2022

1 Beinvolvedintheintroductionofastandardised Europeanproductforprivatepensions

2021 On schedule

2 Accompanyregulatoryprocessesforimplementing theEUSustainabilityActionPlan

2021 On schedule

3 Accompanyregulatoryprocessesinconnection withtheEUrsquosrenewedsustainablefinancestrategy

2021 New

Further development of the general social commitment for sustainability

2022

1 IncreaseISO14001certificationlevelofthetopsuppliers 2021 On schedule

2 BMEcertificationinpurchasing 2022 New

3 Deepengovernanceinsuppliermanagement 2022 New

4 Humanrightsinthesupplychain 2022 New

Institutional clients


Increase sustainable assets under management by 100 from 2019 to 2020

2022

1 Applyexternalqualitystandardsfor sustainableinstitutionalfunds

2020 Completed

2 Expandnumberofcustomerswithmandatesonactive shareownershipby25asagainstreferenceyear2014

2021 On schedule

3 Reviewtheconversionofallinstitutional mutualfundstosustainability

2022 New

Expand communication on sustainability topics and SRI in institutional business

2022

1 Surveyinstitutionalinvestorsontrendsin sustainableinvestment

2020 Completed

2 AddnewparticipantstotheCSRexpertgroup 2020 Completed

3 Createasustainabilityreportforselectedpropertyfunds 2020 Completed

4 ImplementldquoSustainabilityConferencerdquoforcustomers 2020 Completed

5 ExpandsustainabilityreportingforallICfunds 2021 On schedule

174


Retail clients


Increase sustainable AuM by 36 from 2018 to 2022

2022

1 ImplementasustainableRiestersolution 2020 Completed

2 Examineexpansionoftherangeofsustainable products via new launches and product conversion

2021 On schedule

3 Furtherdevelopthesustainabilitycriteria ofoursustainablefunds

2022 On schedule

4 CheckconsequencesofEUregulationsespecially in respect to investment advice and taxonomy

2022 On schedule

Increase sustainable AuM in the Retail Clients segment by 254 from 2021 to 2025

2025 New

Expand communication on sustainable investment 2022

1 Supportandactivelydiscusssustainable investmentwithdistributionpartners

2021 On schedule

2 Continuetodeveloptheinformationmaterial forretailinvestorsanddistributionpartners

2022 On schedule

3 Developasustainabilitystrategyforthe Retail Clients segment

2020 Completed

4 Designandcarryoutsustainabilitytraining forRetailClientsemployees

2020 Completed

5 Enhancetheldquosustainabilityininvestmentrdquo trainingprogramforadvisors

2021 New

6 Expandtheinformationonsustainable investmentfundsonthewebsite

2021 New

Portfolio management


Expand and refine investment processes 2022

1 ContinuetodevelopSIRISexpertisedigitalplatformforsustainabilityandCSRsingle-valueandportfolioanalysisReporting20

2020 Completed

2 PilottheTCFDareasofactionidentifiedin2019 2021 On schedule

3 ExpandandfocustheESGteaminportfoliomanagement 2020 Completed

4 ExpandSIRISreporting(sustainabilityreporting) 2020 Completed

5 Rollouttransformationrating 2021 New

6 Developaclimatechangestrategy 2021 New

Expand active share ownership 2022

1 Expandactiveshareownershipthroughgreater coverageofAGMvotes

2020 Completed

2 IntegrateclimaterisksintotheCSRprocess 2020 Completed

175


Real estate


Expand and refine investment processes for real estate funds 2022

1 FurtherdeveloptheSustainableInvestment Checkwithadditionalcriteriaforacquisitions

2020 Completed

2 Article8productpursuanttoEUDisclosureRegulation 2021 New

3 Sustainabilityriskscore 2021 New

Increase energy efficiency and improve the environmental impact of portfolio properties

2022

1 DefinespecificimprovementtargetsforenergyCO2waterandwasteforportfolioproperties(forasubportfolio)

2025 On schedule

2 IncreasetherecordingofenergyCO2waterandwaste datafromtherelevantpartsoftherealestateportfolio toapproximately75ofthetotalportfolio

2025 On schedule

3 Implementtheoptimisationactionplansthathavebeendeveloped

2020 Completed

4 MeasuretheleveloftargetattainmentfortheoptimisationactionplansthathavebeendevelopedanalysetheenergyCO2waterandwastedatafortherealestateportfolio

2020 Completed

5 Expandenergymonitoringsystem75installationinrealestateportfolioby2025

2025 On schedule

Develop and increase commitment to sustainability across the real estate sector

2022

1 CollaboratewiththeGermanPropertyFederationlsquoSustainshyabilityenergyandenvironmentrsquo(NEU)workinggroupandcontributetotheworkoftheDGNBrsquosrealestateadvisorycommitteeondevelopingthedeterminationofkeyfiguresfortherealestatesectorinGermany

2020 Completed

2 DesignandcollaborateinstudiesinitiativesandratingsforexshyamplerelatingtotheEnvironmentalSustainabilityIndex(ESI)SustainableInvestmentinRealEstate(s-i-r-e)theGlobalRealEstateSustainabilityBenchmark(GRESB)andScope

2020 Completed

3 Studiesinitiativesandratings 2021 New

Fund services


Enhance employeesrsquo sustainability expertise in the Fund Services segment

New

1 IntroduceasustainabilityinitiativeintheFund Services segment

2021 New

2 Digitalworkandenvironmentalprotectiontraining in Germany in the Fund Services segment

2021 New

176


ThereportcoversallmaterialcompaniesoftheUnion Investment Group that are integrated intothesegmentorganisationUnlessexplicitlystatedotherwisethefollowingcompaniesarenotincludedQuoniamAssetManagementGmbH(Quoniam)BEAUnionInvestmentManagementLimited(HongKong)VR-ConsultingpartnerGmbHUnionInvestmentRealEstateFranceSAS(UIRFrance)andtheZBIGroupamajoritystakeinwhichwasacquiredin2020Thecompaniesincludedarethesameasinthepreviousyear

TheemployeekeyfiguresalsoincludeUIRFranceThekeyfiguresfortherealestateportfoliooftheUnionInvestmentGroupareshownforthe20172018and2019financialyearsandcoverpartsoftheglobalrealestateportfolioheldbyUnionInvestment(notincludingportfoliosoftheZBIGroup)Thereportispreparedonceayear

This reportwaspreparedinaccordancewiththeGRI(GlobalReportingInitiative)standardscoreoptionUnionInvestmentalsotakesintoaccountsector-specificrequirementsthataredocumented in the Financial Service Sector Supplement and the Construction and Real Estate SectorSupplementFurthermorethesupplementswerepreparedincompliancewiththeGRIG4standardThereportisbasedontheprinciplesofmaterialitystakeholderinclusivenessandsustainabilitycontextThereportisnotauditedexternally

InadditiontofollowingtheGRIguidelinesthereportcomplieswiththerequirementsoftheGermanPropertyFederationforsustainabilityreportingintherealestatesectorUnionInvestmentisasignatorytotheGermanPropertyFederationsustainabilitycodeandundershytakestocomplywiththetenprinciplesoftheGermanPropertyFederationsustainabilitycodewhenconductingitsbusinessactivitiesInaccordancewiththecodetheUnionInvestmentGrouppublishesitsobjectivesactionplansactivitiesandprogresseachyearincludingdisclosuresrelatingtotheclustersrelevanttothegroup(lsquo2Operatingandleasingrsquoandlsquo3Investingrsquo)

102-45

102-50

102-54

At company level there were no material changes in the period under review relating to the lsquoemployeesrsquolsquosocietyrsquoorlsquoproductsandservicesrsquoareasofactivityhencethedataisdirectlycomparablewithpreviouspublications

InthelsquoenvironmentrsquoareaofactivitysomeofthekeyenvironmentalfiguresatthecompanylevelforthereportingyearareextrapolatedonthebasisofpriorconsumptionandemissionsThisresultsincurrentperformanceindicatorsAssoonastheactualfiguresareavailablefortheextrapolatedfiguresthesewillbeappliedinfuturereportsmeaningthattheremaytemporarilybediscrepanciesbetweentheenvironmentalperformanceindicatorsovertime

UnionInvestmentbasesitsreportscoveringtherealestateportfoliooninternationalstandardssuchastheGreenhouseGasProtocol(GHGProtocol)ThesestandardsarebeingcontinuouslyrefinedwithmodificationstothemethodologyusedInpreparingitsreportontherealestateportfolioUnionInvestmenthastakenintoaccounttheseannualchangestothecalculationandadjustmentmethodsusedfortheCO2datarecordsSomeofthereportedvaluescanthereforedifferfromthosereportedinthepreviousyear

EnglishandGermanversionsoftheannualreportandCSRreportareavailabletodownloadfromourwebsiteAnoverviewoftheUnionInvestmentGroupandrelevantcontactsisavailableonline at httpsunternehmenunion-investmentde

11 About this report

177


12 GRI Index

GRI standard Disclosure Page contents URL

Organisational profile

GRI 102 General disclosures 2016

102-1 Name of the organisation Union Investment Group

102-2 Activities brands products and services Seepage129

102-3 Location of headquarters Weissfrauenstrasse7 60311FrankfurtamMainGermany

102-4 Location of operations Seepage129

102-5 Ownership and legal form Seepage129

102-6 Markets served Seepage129

102-7 Scale of the organisation See consolidated financialstatements

102-8 Information on employees and other workers

Seepage160

102-9 Supply chain Seepage170

102-10 Significant changes to the organisation and its supply chain

Seepage170

102-11 Precautionary principle or approach Seepage131

102-12 External initiatives Seepage136

102-13 Membership of associations Seepage136

Strategy


102-14 Statement from senior decision-makers Seepage131

102-15 Key impacts risks and opportunities

Seepage131

Ethics and integrity


102-16 Values principles standards and norms of behaviour

Seepage132

102-17 Mechanisms for advice and concerns about ethics

Seepage168


Governance


102-18 Governance structure Seepage133

102-19 Delegating authority Seepage133

102-20 Executive-level responsibility for economic environmental and social topics

Seepage133

102-21 Consulting stakeholders on economic environmental and social topics

Seepage163

102-22 Composition of the highest governance body and its committees

Seepage129

102-23 Chair of the highest governance body Seepage129

102-24 Nominating and selecting the highest governance body

Seepage129

102-25 Conflicts of interest Seepage130

102-26 Role of highest governance body in setting purpose values and strategies

Seepage133

102-27 Collective knowledge of highest governance body

Seepage133

102-28 Evaluating the highest governance bodyrsquos performance

Seepage133

102-29 Identifying and managing economic environmental and social impacts

Seepage131

102-30 Effectiveness of risk management processes

Seepage133

102-31 Review of economic environmental and social topics

Seepage133

102-32 Highest governance bodyrsquos role in sustainability reporting

Seepage133

102-33 Communicating critical concerns Seepage133

102-34 Nature and total number of critical concerns

Seepage133

102-35 Remuneration policy Seepage162

102-36 Process for determining remuneration Seepage163

178



Stakeholder engagement


102-40 List of stake-holder groups Seepage135

102-41 Collective bargaining agreements Seepage162

102-42 Identifying and selecting stakeholders Seepage134

102-43 Approach to stakeholder engagement Seepage134

102-44 Key topics and concerns raised Seepage134

102-45 Entities included in the consolidated financial statements

See page 109 andpage176

102-46 Defining report content and topic boundaries

Seepage134

102-47 List of material topics Seepage134

102-48 Restatements of information None

102-49 Changes in reporting None

102-50 Reporting period Seepage176

102-51 Date of most recent report May 2020

102-52 Reporting cycle Annually

102-53 Contact point for questions regarding the report

The relevant contacts are stated on the Union InvestshymentGroupwebpresenceat wwwunion-investmentde

102-54 Claims of reporting in accordance with the GRI standards

Seepage176

102-55 GRI content index Startsonpage177 (startoftheindex)

102-56 External assurance The report was not audited externally



GRI 103 Management approach 2016

103-1 Explanation of the material topic and its boundary

Seepage134

103-2 The management approach and its components

The management approaches are discussed in the respective sections

103-3 Evaluation of the management approach Seepage134

Economy

GRI 201 Economic performance 2016

201-1 Direct economic value generated and distributed

See page 42(Consolidatedfinancialstateshyments(IFRS)ofUnionAssetManagementHoldingAGforthefinancialyearfrom1Janushyaryto31December2020)

201-2 Financial implications and other risks and opportunities due to climate change

Seepage164

201-3 Defined-benefit plan obligations and other retirement plans

Seepage163

201-4 Financial assistance received from government

None

GRI 203 Indirect economic impacts 2016

203-1 Infrastructure investments and services supported

Seepage138

GRI 204 Procurement practices 2016

204-1 Proportion of spending on local suppliers

Seepage170

GRI 205 Anti-corruption 2016

205-1 Operations assessed for risks related to corruption

Seepage168

205-2 Communication and training about an-ti-corruption policies and procedures

Seepage168

205-3 Confirmed incidents of corruption and actions taken

Seepage168

GRI 206 Anti-competitive behaviour 2016

206-1 Legal actions for anti-competitive behaviour anti-trust and monopoly practices

Seepage168

179



Environment

GRI 301 Materials 2016

301-1 Materials used by weight or volume Seetableonpage165

301-2 Recycled input materials used Seepage165

GRI 302 Energy 2016

302-1 Energy consumption within the organisation

Seetableonpage165

302-2 Energy consumption outside of the organisation

Seepage166

302-3 Energy intensity Seetableonpage165

302-4 Reduction of energy consumption Seepage165

GRI 303 Water 2016

303-1 Water withdrawal by source Seetableonpage165

GRI 305 Emissions 2016

305-1 Direct (Scope 1) GHG emissions Seetableonpage166

305-2 Energy indirect (Scope 2) GHG emissions Seetableonpage166

305-3 Other indirect (Scope 3) GHG emissions Seetableonpage166

305-4 GHG emissions intensity Seetableonpage166

305-5 Reduction of GHG emissions Seetableonpage166

GRI 306 Effluents and waste 2016

306-1 Water discharge by quality and destination

Seepage165

306-2 Waste by type and disposal method Seetableonpage166

GRI 308 Supplier environmental assessment 2016

308-1 New suppliers that were screened using environmental criteria

Seepage170

308-2 Negative environmental impacts in the supply chain and actions taken

Seepage170


Social

GRI 401 Employment 2016

401-1 New employee hires and employee turnover

Seetableonpage160

401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees

Seepage162

GRI 403 Occupational health and safety 2016

403-2 Types of injury and rates of injury occupational diseases lost days and absenteeism and number of work-related fatalities

Seepage161

403-3 Workers with high incidence or high risk of diseases related to their occupation

Seepage161

GRI 404 Training and education 2016

404-1 Average hours of training per year per employee

Seetableonpage161

404-2 Programs for upgrading employee skills and transition assistance programs

Seepage161

404-3 Percentage of employees receiving regular performance and career development reviews

Seepage160

GRI 405 Diversity and equal opportunity 2016

405-1 Diversity of governance bodies and employees

Seetableonpage162

405-2 Ratio of basic salary and remuneration of women to men

Seepage162

GRI 406 Non-discrimination 2016

406-1 Incidents of discrimination and corrective actions taken

None

GRI 407 Freedom of association and collective bargaining 2016

407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

Seepage170

GRI 409 Forced or compulsory labour2016

409-1 Business locations and suppliers with significant risk for incidents of forced or compulsory labour

Seepage170

180



GRI 414 Supplier social assessment 2016

414-1 New suppliers that were screened using social criteria

Seepage170

414-2 Negative social impacts in the supply chain and actions taken

Seepage170

GRI 415 Public policy 2016

415-1 Political contributions Seepage136

GRI 417 Marketing and labelling 2 016

417-1 Requirements for product and service information and labelling

Seepage137

417-2 Incidents of non-compliance concerning product and service information and labelling

None

417-3 Incidents of non-compliance concerning marketing communications

None

GRI 418 Customer privacy 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

None

GRI 419 Socioeconomic compliance 2016

419-1 Non-compliance with laws and regulations in the social and economic area

None

Industry-related disclosures (G4-FS and G4-CRE)

Product portfolio G4- DMA (FS1)

Policies with specific environmental and social components applied to business lines

Seepage137 (productsandservices)

G4- DMA (FS2)

Procedures for assessing and screening environmental and social risks in business lines

Seepage137

G4- DMA (FS5)

Interactions with clientsinvestees business partners regarding environmental and social risks and opportunities

Seepage138


Active ownership

G4-FS10

Percentage and number of companies held in the institutionrsquos portfolio with which the reporting organisation has interacted on environmental or social issues

Seepage138

G4-FS11

Percentage of assets subject to positive and negative environmental or social screening

Seepage139

G4-FS12

Voting policy(ies) applied to environmental or social issues for shares over which the reporting organisation holds the right to vote or advises on voting

SeeProxyVotingpolicy

Product and service labelling

G4-DMA (FS15)

Policies for the fair design and sale of financial products and services

Seepage137

Energy G4-CRE1

Building energy intensity Seetableonpage147

Water G4-CRE2

Building water intensity Seetableonpage147

Emissions G4-CRE3

Greenhouse gas emissions intensity from buildings

Seetableonpage147


G4-CRE8

Type and number of sustainability certifications rating and labelling schemes for new construction manage-ment occupation and redevelopment

Seetableonpage147

PublisherUnion Asset Management Holding AGWeiszligfrauenstraszlige760311FrankfurtamMainTelephone+4969589986060Telefax+4969589989000E-mailserviceunion-investmentdeWebsiteunternehmenunion-investmentde

Board of Managing DirectorsHansJoachimReinkeChiefExecutiveOfficerAlexanderSchindlerJensWilhelmAlexanderLichtenberg

EditorsStefanKantzenbachCorporateCommunicationsAlexanderProumlgerCorporateCommunicationsUnionAssetManagementHoldingAGFrankfurtamMain

2


Contents

Foreword 5

Report of the Supervisory Board 6

Group management report of Union Asset Management Holding AG 9 As at 31 December 2020

A Basic information on the group 10


General economic and industry conditions 13 Specificbusinessperformance 16 Business environment 20 Research and development 23 Positionofthecompany 27 Dependent company report 34



Report on opportunities 35 Reportonrisks 36 Forecast 40

E Non-financial statement 40

Consolidated financial statements of Union Asset Management Holding AG for the financial year from 1 January to 31 December 2020 Consolidated income statement 42 Statement of comprehensive income 42 Consolidated statement of financial position 43 Statement of changes in equity 44 Statement of cash flows 45 Notes to the consolidated financial statements 47

Basisofpreparation 47[1]Principlesofgroupaccounting 47[2]Accountingpolicies 47[3] Consolidated group 49[4]Principlesofconsolidation 49[5] Estimates 50[6]Financialinstruments 51[7]Fairvaluemeasurementoffinancialinstruments 54[8] Currency translation 54[9] Cash reserve 54[10]Loansandadvancestobanksandcustomers 54[11]Allowancesforlossesonloansandreceivables 54[12] Investment securities 54[13]Sharesincompaniesaccountedforusingtheequitymethod 55[14]Propertyplantandequipment 55[15]Intangibleassets 55[16]Rightofuseassets 55

3









4








Imprint 181

5








Happy reading


Foreword


6




















7




















9



Note



10















11




Asset management

companies





PropertyGmbH


Banks


Service companies




ZBIImmobilien AG


Other subsidiaries


GmbH



VisualVestGmbH

Financial companies


Associates

R+VPensionsfondsAG



mentmbH

Asset management

companies



Hongkong


AustriaAGWien



GmbHWien

Securities trading

companies


attraxSA Luxemburg



Segments


Segment

Fund Services

Segment

Infrastructure

Segments



Support services







12






13


B Economic report


11 Capital markets





1 hard currencies



Equities


Bonds Commodities

Germany

35

-363

625

Eurozone

-363

-51

489

USA

163

-307

679

Japan

160

-300

658

China

272

-138

476

EmMarkets

166

-273

603

Federal bonds

0811

-03

Euro government

bonds

50

-20

72

Euroshy Corporates

26

-71

105

Euroshy High Yield

28

-194

275

EM government

bonds1

53

-189

298

Brent

-659

1296

Gold

248

-30

-217

287

Copper

260

-248

675

14







2019 2020 2021 2019 2020 2021

GermanyGermany

06

-56

33

13

03

13

EurozoneEurozone

13

-71

44

12

03

07

USAUSA

23

-36

36

18

12

17

JapanJapan

07

-53

29

05

00 00

ChinaChina

61

19

85

29

25

15

15














16

















Fund assets 347269669 327829763 19439906






Total 385934584 368208391 17726193

17












-392004 -1122029 730025

Total 15110740 19372677 -4261937





Mutual funds 220988398 210056614 10931784

Equityfunds 59385668 56216994 3168674



Mixedfunds 65178950 59300085 5878865






Hybridfunds 1343282 866130 477152

Special fund 126281271 117773149 8508122

Equityfunds 704307 631657 72650


Mixedfunds 81237722 76213675 5024047





Total 347269669 327829763 19439906

18











(figuresin)


Equityfunds

58

86

28



04

30

26


Money marketbonds

0ndash112

09

-03


Mixedfunds

23

40

17



08

-13

-21


19


















AuM Netsales

2019 20192020 2020

1604

2078

1738

2121

81 113

+8

+2

88 63

20


















134

216

126

17


Mutual funds

Special funds

Other formats

21
















22

















23













1 Retail Clients








24
















25







3 2021 outlook

31RetailClients







26






27




2020 2019 Change




-17 -12 -05


89 98 -09



0 -01 01


62 62 ndash







-832 -434 -398


46 339 -293


Staffcosts -4519 -4280 -239






Income taxes -1892 -1697 -195


Attributableto


4508 4723 -215


2020 2019 Change


3859 3682 177




2020 2019 Change









Other 1194 1135 59



Other -4534 -4317 -217

Total 15659 14680 979



28











2020 2019 Change


Total -3906 -4127 221

IT expenses -1090 -1055 -35












29




Distribution














30







Bank holdings 5862 254 5370 263 492


23043 1000 20457 1000 2586





4161 242 4538 301 -377









Funding 918 53 989 66 -71

























31


3 Net assets






Banks 5920 170 5415 184 505

Customers 802 23 1094 37 -292




617 18 1302 44 -685


3437 99 1747 60 1690





Total assets 34851 1000 29357 1000 5494



Liabilities to

Banks 301 09 269 09 32

Customers 15 00 12 00 03


Provisions 2574 74 2287 78 287





Equity 17882 513 15545 530 2337












32



31 Dec 2020

EUR million

31 Dec 2019

EUR million

Change

EUR million




856 737 119



Total 2574 2287 287











33














34





2020 2019















35



















36




II Report on risks













37




















asat31December2020

38












39









40


III Forecast


























42




UMH Group Note 2020

EUR thousand

2019

EUR thousand





[27] -17 -54


6210 6201






[30] -83179 -43410


[31] 4603 33871




Income taxes [24] [34] -189224 -169674


Attributableto


450752 472330



UMH Group Note 2020

EUR thousand

2019

EUR thousand





[35][36][56] ndash shy8


[36][56] -4608 1663


[36] ndash 0



[36][56] -116 1882


-14793 -12676


[36] -2661 7281


Attributableto


428842 470789


43




EUR thousand

31 Dec 2019

EUR thousand







[13] [42] 61743 130187




Other assets [46] 217419 217063



Total assets 3485066 2935706


EUR thousand

31 Dec 2019

EUR thousand




Provisions [20] [21] [52] 257382 228659




Equity [56] 1788159 1554526









44




Retained earnings



reserve


for sale



trolling interests

Non-con-trolling

interests

Total equity


1 Jan 2019 87130 18617 843017 18701 11148 -3500 339059 1314172 24077 1338249










31 Dec 2019 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526

1 Jan 2020 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526










31 Dec 2020 87130 18617 1171839 20362 8203 ndash 450752 1756903 31256 1788159

45


UMH Group 2020

EUR thousand

2019

EUR thousand




143363 96788





Subtotal 1459979 1344817













UMH Group 2020

EUR thousand

2019

EUR thousand
















-207092 -253397










46








47























48























49





























50



[5] Estimates





















51































52





























53

















Embeddedderivatives








54











[9] Cash reserve















55



























56





















57

















[23] Income











58





[24] Income taxes
















59



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









168 ndash 168





Total 6227 6255 -28



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash ndash ndash






ndash ndash ndash


-17 -54 37






1 1 ndash







ndash ndash ndash

Total -17 -54 37



60



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Other 119407 113493 5914





Other shy105323 -75311 shy30012

Total 1565889 1467998 97891









61



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-5018 2443 -7461


shy5018 2443 -7461


48496 ndash 48496


48496 ndash 48496

Total 43478 2443 41035


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-96954 -58311 -38643


-95487 shy52850 -42637


-1467 -5461 3994


13775 14901 -1126


13775 14901 -1126


13775 14901 -1126

Total -83179 -43410 -39769

62



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Associates -1266 27293 -28559

Total 4603 33871 -29268


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Staff costs -451965 -428002 -23963




-15718 -14714 shy1004







Miscellaneous -100562 -106424 5862





Total -919094 -909448 -9646


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



16354 11839 4515



975 ndash 975


671 176 495









shy994 -474 shy520


-277 shy331 54






ndash 73006 -73006


ndash 73006 -73006

Total 31508 92531 -61023

63


[34] Income taxes


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



Total -189224 -169674 -19550


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




203007 203248 -241


-22674 -41169 18495


4371 5936 -1565



-6128 -4274 shy1854



-1687 shy914 -773


4937 256 4681


Other 2813 1340 1473




64






65




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1655 -6263


ndash 0 0


-4608 1655 -6263


ndash shy8 8


ndash 0 0


ndash -8 8


-4608 1663 -6271


ndash ndash ndash


-4608 1663 -6271


-14909 -10794 -4115


-2661 7281 -9942

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17570 -3513 -14057


-116 1882 shy1998


-76 shy21 shy55


-192 1861 -2053


-14793 -12676 -2117


shy2585 7302 -9887


-17378 -5374 -12004



-2661 7281 -9942


66


[37] Cash reserve

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 44 17 27


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





Total 592026 541495 50531



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



38264 42663 -4399

Total 80211 109442 -29231





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 1743050 1503473 239577


67




securities


Total



Cost as at 1 Jan 2019 990683 6650 997333

Additions 840727 2239 842966




Cost as at 31 Dec 2019 1480039 8889 1488928


-15478 16197 719


607 1275 1882


12431 ndash 12431




0 ndash 0


-2927 17472 14545



securities


Total


Cost as at 1 Jan 2020 1480039 8889 1488928

Additions 812030 50 812080


Disposals -614498 shy50 -614548


Cost as at 31 Dec 2020 1677573 40635 1718208


-2927 17472 14545


1187 shy1303 -116


15510 ndash 15510




8673 16169 24842


68



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 61743 130187 -68444





Total




2348 17166 19514


shy4230 -10127 -14357





shy5052 -13717 -18769


shy10921 shy12451 -23372






69



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 36708 25440 11268


Land and buildings


equipment

Total



Cost as at 1 Jan 2019 25650 22983 48633

Additions 3271 4693 7964



Cost as at 31 Dec 2019 28921 24938 53859


-11319 -15027 -26346





-12575 -15844 -28419


Land and buildings


equipment

Total


Cost as at 1 Jan 2020 28921 24938 53859

Additions 9310 4514 13824



Cost as at 31 Dec 2020 32325 26780 59105


-12575 -15844 -28419






-7704 -14693 -22397




70



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 306954 149300 157654


71





software

Purchased customer

relationships


assets

Total



















Cost as at 31 Dec 2020 98778 406076 1987 68056 45181 620078











72



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Germany 20070 2242 17828




207959 117651 90308


51019 43333 7686

Netting -177162 -78438 -98724

Total 107334 90450 16884





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



0 96 -96










Total 258978 160984 97994

73


[46] Other assets

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








108 ndash 108


12280 11011 1269


Total 217419 217063 356



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



5329 5938 -609

Total 300359 102963 197396



Land and buildings


equipment

Total



Additions 2939 1888 4827







18532 ndash 18532

Additions 167853 2580 170433






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 39218 37740 1478

74



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 30101 26884 3217


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 1525 1167 358


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 179852 96641 83211

[52] Provisions

31 Dec 2020

EUR thousand

31122019

EUR thousand

Change

EUR thousand



153334 137642 15692


85604 73726 11878


35671 21737 13934


49933 51989 -2056



559 556 3



Total 257382 228659 28723



75




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Germany 393413 358527 34886






Total 401032 365499 35533






2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









12155 28702 -16547



31 Dec 2020

31 Dec 2019

Change

Percentage points






76




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533


shy43339 shy40154 shy3185


58658 54234 4424


4788 3313 1475


shy4545 shy5134 589


6630 5831 799


-6309 shy5554 -755


7132 6352 780


-7327 -6540 -787


Plan assets


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533







153334 137642 15692



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




10175 25955 -15780






77







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


148376 133815 14561


571 500 71


Total 247806 227857 19949

Reimbursementrights


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




shy538 189 -727









Total



Additions 1087 1087




20 20


78



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






162120 73284 88836


17918 7129 10789

Netting -177162 -78438 -98724

Total 59931 68506 -8575




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



1613 346 1267










Total 180038 80413 99625

79



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






ndash 5000 -5000






Total 865695 855183 10512


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 302421 104140 198281

[56] Equity

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








Total 1788159 1554526 233633

Issued capital




Capital reserves


80


Retained earnings



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17168 -4997 -12171

Total -17168 -4997 -12171




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-134 1801 -1935

Total -134 1801 -1935




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1663 -6271

Total -4608 1663 -6271




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash -8 8

Total ndash -8 8




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-57 61 -118


-211 -378 167

Total -268 -317 49

81




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






44651 40663 3988






1726054 1539905 186149






64108 32477 31631



7304 6116 1188



179852 101641 78211



ndash 5000 shy5000




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




Total 64108 32478 31630


82




31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand











83



31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand













84





EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















85



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















86



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand





















87



Netgainsandlosses


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-81081 -33073 -48008


shy81081 -33073 shy48008


1398 1607 -209


1398 1607 shy209







2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



-1605 -2109 504

[61] Fair values





88



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





80211 109442 shy29231










EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










ndash 5000 shy5000


ndash 5000 shy5000

89





Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand











ofwhichlevel2 1674495 1462924 211571

ofwhichlevel3 68555 40550 28005





Total 1790162 1572382 217780


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 179852 87165 92687



ndash 5000 -5000




Total 179852 101641 78211




90


Reclassifications






EUR thousand

2019

EUR thousand

Change

EUR thousand



1615 -20787 22402





EUR thousand

2019

EUR thousand

Change

EUR thousand





shy3803 2133 -5936







EUR thousand

2019

EUR thousand

Change

EUR thousand



4415 1638 2777





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






91







Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 584132 538462 45670








ofwhichlevel2 180667 170528 10139


Total 845010 818432 26578

92



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand













Total 44651 46443 -1792




Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 591927 541487 50440







Up to one month 70417 96465 -26048



















Indefinite 1743050 1503473 239577

93


Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 171443 167897 3546





Indefinite 3 6 shy3







Indefinite 39218 37740 1478


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 30101 26884 3217



























94



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ndash 5000 ndash

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









95



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

























Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 3720 5651 -1931

96



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

















Total 5533 6818 -1285


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 50827 55749 -4922


97


Other disclosures





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Revenue elements





Other 119407 113493 5914




Germany 2147713 2053096 94617





At a point in time 448874 429405 19469





98






banks

EUR thousand


customers

EUR thousand

Other receivables

EUR thousand

Total

EUR thousand

As at 1 Jan 2019 5063 83485 137579 226127

Additions 41840 436126 2251938 2729904



Other 1 6 11 18

As at 31 Dec 2019 4462 109405 166508 280375

As at 1 Jan 2020 4462 109405 166508 280375

Additions 47608 399016 2358694 2805318

Disposals -46252 -430077 -2349187 -2825516


Other 4 1540 952 2496

As at 31 Dec 2020 5822 79866 176967 262655








99

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 31257 23779 7478


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 9439 8182 1257

100






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 404645 352739 51906

Liabilities 202837 169876 32961

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 1 -4 5

101














31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 44155 36694 7461


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






102







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 76536 84644 -8108

Liabilities 44218 47621 -3403

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 0 -5 5






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 17676 17778 -102


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






103
















31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 66992 75747 -8755


Liabilities -9019 -12266 3247


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-15928 -14662 -1266

Income taxes -2160 -2428 268




104



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Goodwill 25601 27955 shy2354


54008 59060 -5052


Other associates



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


3699 2278 1421


ndash ndash ndash










105


Unrecognised losses



Nature of interests















106




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

31 Dec 2020

Number

31 Dec 2019

Number

Mutual funds 198731859 184703333 341 334


789858 1702590 14 25

Special fund 125070213 116299113 426 418



Total 323802072 301002446 767 752


789858 1702590 14 25



ofwhichguarantee

funds

ofwhichguarantee

funds

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1941168 27 33183 ndash 1974351












1857481 -11761 33180 ndash 1890661



744892 744892 ndash ndash 744892





2602373 733131 33180 ndash 2635553


107



ofwhichguarantee

funds

ofwhichguarantee

fund

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1701823 69 31944 ndash 1733767












1644906 -10096 31939 ndash 1676845



1573585 1573585 ndash ndash 1573585





3218491 1563489 31939 ndash 3250430






2020 financial year



commission income




profit or loss












Total 2507607 7297 8758 2523662 ndash



108


2019 financial year



commission income




profit or loss












Total 2362690 8180 17345 2388215 ndash







Volume Number

31122020

EUR thousand

31122019

EUR thousand

31122020

Number

31122019

Number





109



Nature of support





















Banks





Finance companies


Service companies






Other subsidiaries




110














490 ndash

































111
















112



31 Oct 2020

EUR thousand


Cash reserve 9





Other assets 27365


Provisions 2439











[72] Leases

UMH Group as lessee





113



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-4632 -4360 -272


Total -44694 -41063 -3631




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





59744 173220 -113476

Total 421547 484942 -63395



UMH Group as lessor

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


23 83 -60








23 83 -60









114




2020

Number

2019

Number

Change

Number












[75] Auditor fees


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Total 1325 2178 -853




115









Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










Other assets 13717 13440 277








116



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



















EUR thousand

2019

EUR thousand

Change

EUR thousand



























117



EUR thousand

2019

EUR thousand

Change

EUR thousand








EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




45 45 ndash


2579 2242 337

Total 17483 14593 2890








118










UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember








Name Position(s)














119



Name Position(s)





Name Position(s)






























120








121
















122













123










124



Shareholders


7232


2425


343

Asat10March2021















UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember





125


Advisory Board





































Asat10March2021

126








Employees 160





Aboutthisreport 176

GRIIndex 177

127




128







129


The company






102-2

102-6

102-6

102-4







102-23

102-22

102-24


102-5

130






102-25

131






102-29

102-11

102-14





102-15


132





102-16

Our values






133








102-18

102-31

102-27

102-32

102-33

102-34

102-28

102-30

102-31






102-18

102-19

102-20

102-26


134











102-46

102-47

103-1

103-2






102-42

102-43

102-44

135





102-40

30

2018

7

5

4

4

33

2 1


136



10

30

50

40

20

50 40 2030 10

Society


Productsservices

Rel

evan

ce t

o e

mp

loye

es a

nd

man

ager

s



Unimportant








415-1

102-12

102-13

137








417-1

G4-FS15

G4-FS2












3859 billion euros

138


57

270

34

420163

55

52

18

22

77

17824

14 3123 57

28

3842

60

2085

24

15

28

7 13

11




53 Engagement





203-1

G4-FS5



G4-FS10


2020 1938 votes


139









G4-FS11








140











141







2018 2019 2020

Numberofproperties


Numberofproperties


Numberofproperties


148 63 155 66 216 70






142








143











144













145










Total 281 6130713 100






Total 230 6220830 100






Total 287 7382628 100







Total 358 7553524 100






Total 326 8278251 100






Total 379 9647660 100

146











Total portfolio

Total portfolio

Total portfolio

2019

2018

2017

2017

19

81

2017

22

78

2019

23

77

2019

24

76

2018

25

75

2018

29

71

48

50

51

42

46

48

34

31

28

30

32

28

11

9

12

12

11

13

7

9

9

16

11

11


147





2017(358

properties)

2018(326

properties)

2019(379

properties)











[kWh(msup2a)] 226 227 231










Portfolio under

review

Office buildings

Retail buildings

Hotel buildings

Logistics buildings


[kWh(msup2a)]

223 231 217 262 63


[kg CO2(msup2a)]

57 51 63 74 21


[msup3 (msup2a)]

069 063 068 147 005








148










2017

9

91

2019

11

89

2018

10

90

1620 1614 1633

149







2017

3

16

34

47

2019

3

14

37

46

2018

3

15

34

47

1620 1614 1633

2017

758

2018

755

2019

753


2017

553

2018

553

2019

603

Retail buildings

2017

254

2018

250

2019

232

Hotel buildings

2017

55

2018

56

2019

45

Logistics buildings

150



bytypeofconsumption






2017

63

37

2019

65

35

2018

64

36

226 227 231228 228

42 41

58 59

2017

242

2018

243

2019

237


2017

223

2018

225

2019

244

Retail buildings

2017

295

2018

290

2019

276

Hotel buildings

2017

69

2018

72

2019

67

Logistics buildings

43

2049

4257

80

51

58

2255

39

2452

42

78

45

61

7648

58

151




305-3




2017

8

92

2019

9

91

2018

6

94

434918 434744 450307


305-3

152







2017

4

17

39

40

2019

4

15

42

39

2018

4

15

38

43

434918 434744 450307

2017

173633

2018

185425

2019

177266


2017

170665

2018

165425

2019

187728

Retail buildings

2017

72862

2018

67372

2019

68563

Hotel buildings

2017

17758

2018

16522

2019

16749

Logistics buildings

153



bytypeofconsumption



bytypeofconsumption



2017

74

26

2019

77

23

2018

74

26

56 58 63

59 59

65 67

35 33

2017 2018 2019


2017

66

2018

65

2019

72

Retail buildings

2017

78

2018

76

2019

77

Hotel buildings

2017

21

2018

20

2019

21

Logistics buildings

68

82

69

7632

18

31

24

85

67

78

85

67

79

15

33

2215

33

21

51 52 56

154







2017

1

30

38

37

2019

1

26

42

32

2018

1

30

38

31

4518574 4506013 4403141

2017

1386013

2018

1382160

2019

1416601


2017

1732593

2018

1727777

2019

1829872

Retail buildings

2017

1363573

2018

1359782

2019

1123207

Hotel buildings

2017

36395

2018

36294

2019

33462

Logistics buildings

303-1

155








2017 20192018

057 057 056057

2017 2018 2019 2017

067

2018

065

2019

063

2017

146

2018

144

2019

140

2017

004

2018

004

2019

004

039 039 040

057


156







2017

11

16

40

34

2019

11

13

39

37

2018

11

16

40

33

52380 52365 54186

2017

17587

2018

17782

2019

19808

2017

20893

2018

22515

2019

21075

2017

8253

2018

8141

2019

7104

2017

5647

2018

5749

2019

6199


157




67 67



2017

54

17

16

13

2019

60

49

11 14

1424

15 13

2018

59

15

14

12

66 65 70

2017

50

2018

51

2019

56

2017

81

2018

80

2019

83

2017

88

2018

74

2019

85

2017

67

2018

70

2019

77

5658

59

13 1323

19 17 10

12 12 16

6057

35

39 59

77 8079

23

14

15

183

5 41

11

13

18

19 13

7 67

715

3224 25

11 10 13


158










Total 263 6852618 100







2018 2018

64

71

3629

2019 2019

65

71

3529

228 560227 550227 590

159






2018 2018

54

18

15

15

2019 2019

53

18

16

13

056 66056 67057 67





160


61 HR strategy





404-3


6 Employees


Male 1796 145 1941

Female 1362 125 1487

Total 3158 270 3428


Male 1729 212 1941

Female 822 665 1487

Total 2551 877 3428



Male 43 67 20 130

Female 30 40 8 78

Total 73 107 28 208



Male 6 35 10 51

Female 10 23 2 35

Total 16 58 12 86



Male 280 304 174 263

Female 498 251 054 235

Total 386 280 127 251

102-8

401-1

401-1

401-1

161









403-2

403-3













404-1

404-2

162


65 Diversity











102-35

401-2

102-41

405-2

Employee diversity


Male 214 1152 575 1941 566

Female 201 916 370 1487 434

Total 415 2068 945 3428 1000




405-1

405-1

163





102-36

102-21

201-3

164












201-2

165
















301-1301-2

302-1302-3 2018 2020

Type of energy

Consumption in MJ


[MJFTE2]

Consumption in MJ


year in MJ


[MJFTE2]

Petrol 186709 64 358724 -172014 11457

Diesel 21343447 7332 18063715 3279732 576931

Naturalgas 13338587 4582 14383066 -1044479 459376


Electricity 35520015 12202 31520221 3999794 1006714

Total 81597741 28030 74935498 6662243 2393341




2019 2020




306-1303-1

302-4

166




302-2



CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


29922 20599 279 6579 9323 3116

Naturalgas 16052 3242 44 1035 12810 7980




69298 4627 63 1478 64671 9332

Paper consumption

13851 5574 76 1780 8277 5976


36213 8297 112 2650 27916 7709

Watersupply 194 226 03 72 -32 -1631

Hotel accommodation

684 1454 20 464 -770 -11254


Workingfromhome

0 1280 17 409 -1280 shy

Letters 6217 28 00 09 6189 9956

Parcels 1164 00 00 00 1164 10000

Waste 1156 1311 18 419 -155 -1339

Events 35671 14154 192 4521 21517 6032

Toner consumption

507 120 02 38 387 7624

Total 233806 73793 1000 23569 160013 6844




CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


692985 453541 144855 239444 3455

Total sup2 2338060 1145200 365762 1192860 5102


305-1305-2305-3305-4305-5

305-5






Glasswaste(t) 26 28


Other








306-2

167




Flight 10367201 2151090

Cars 1224621 447442

Rail 5199039 1448478









168



81 Human rights














205-1

205-2

102-17

205-3

206-1

169




170








308-1

414-1

102-9

308-2









414-2

409-1

407-1

204-1

102-10


171







2022



2021 Extended







Communication



2022


2021 New


2021 New


2022 New


2022 New


2022 New

172


Environment



2022


2022 New


2021 New


2022 New


2022





2025 New


2021 New


2022


2022 On schedule


2022 On schedule


2022 On schedule

Employees



2022



2021 New



2020 Completed




2020 Completed


2022 On schedule


173


Society



2022


2020 Completed


2020 Extended



2022


2021 On schedule


2021 On schedule


2021 New


2022








2022


2020 Completed


2021 On schedule


2022 New


2022


2020 Completed





174


Retail clients



2022



2021 On schedule


2022 On schedule


2022 On schedule


2025 New



2021 On schedule


2022 On schedule


2020 Completed


2020 Completed


2021 New


2021 New





2020 Completed








2020 Completed


175


Real estate




2020 Completed




2022


2025 On schedule


2025 On schedule


2020 Completed


2020 Completed


2025 On schedule


2022


2020 Completed


2020 Completed


Fund services



New


2021 New


2021 New

176






102-45

102-50

102-54






177


12 GRI Index












Seepage160



Seepage170




Strategy




Seepage131




Seepage132


Seepage168


Governance





Seepage133


Seepage163


Seepage129



Seepage129



Seepage133


Seepage133


Seepage133


Seepage131


Seepage133


Seepage133


Seepage133



Seepage133



178













Seepage134










Seepage176







Seepage134




Economy





Seepage164


Seepage163


None



Seepage138



Seepage170



Seepage168


Seepage168


Seepage168



Seepage168

179



Environment




GRI 302 Energy 2016


Seetableonpage165


Seepage166



GRI 303 Water 2016










Seepage165




Seepage170


Seepage170


Social



Seetableonpage160


Seepage162



Seepage161


Seepage161



Seetableonpage161


Seepage161


Seepage160



Seetableonpage162


Seepage162



None



Seepage170



Seepage170

180





Seepage170


Seepage170





Seepage137


None


None



None



None





G4- DMA (FS2)


Seepage137

G4- DMA (FS5)


Seepage138


Active ownership

G4-FS10


Seepage138

G4-FS11


Seepage139

G4-FS12




G4-DMA (FS15)


Seepage137

Energy G4-CRE1


Water G4-CRE2


Emissions G4-CRE3


Seetableonpage147


G4-CRE8


Seetableonpage147




3









4








Imprint 181

5








Happy reading


Foreword


6




















7




















9



Note



10















11




Asset management

companies





PropertyGmbH


Banks


Service companies




ZBIImmobilien AG


Other subsidiaries


GmbH



VisualVestGmbH

Financial companies


Associates

R+VPensionsfondsAG



mentmbH

Asset management

companies



Hongkong


AustriaAGWien



GmbHWien

Securities trading

companies


attraxSA Luxemburg



Segments


Segment

Fund Services

Segment

Infrastructure

Segments



Support services







12






13


B Economic report


11 Capital markets





1 hard currencies



Equities


Bonds Commodities

Germany

35

-363

625

Eurozone

-363

-51

489

USA

163

-307

679

Japan

160

-300

658

China

272

-138

476

EmMarkets

166

-273

603

Federal bonds

0811

-03

Euro government

bonds

50

-20

72

Euroshy Corporates

26

-71

105

Euroshy High Yield

28

-194

275

EM government

bonds1

53

-189

298

Brent

-659

1296

Gold

248

-30

-217

287

Copper

260

-248

675

14







2019 2020 2021 2019 2020 2021

GermanyGermany

06

-56

33

13

03

13

EurozoneEurozone

13

-71

44

12

03

07

USAUSA

23

-36

36

18

12

17

JapanJapan

07

-53

29

05

00 00

ChinaChina

61

19

85

29

25

15

15














16

















Fund assets 347269669 327829763 19439906






Total 385934584 368208391 17726193

17












-392004 -1122029 730025

Total 15110740 19372677 -4261937





Mutual funds 220988398 210056614 10931784

Equityfunds 59385668 56216994 3168674



Mixedfunds 65178950 59300085 5878865






Hybridfunds 1343282 866130 477152

Special fund 126281271 117773149 8508122

Equityfunds 704307 631657 72650


Mixedfunds 81237722 76213675 5024047





Total 347269669 327829763 19439906

18











(figuresin)


Equityfunds

58

86

28



04

30

26


Money marketbonds

0ndash112

09

-03


Mixedfunds

23

40

17



08

-13

-21


19


















AuM Netsales

2019 20192020 2020

1604

2078

1738

2121

81 113

+8

+2

88 63

20


















134

216

126

17


Mutual funds

Special funds

Other formats

21
















22

















23













1 Retail Clients








24
















25







3 2021 outlook

31RetailClients







26






27




2020 2019 Change




-17 -12 -05


89 98 -09



0 -01 01


62 62 ndash







-832 -434 -398


46 339 -293


Staffcosts -4519 -4280 -239






Income taxes -1892 -1697 -195


Attributableto


4508 4723 -215


2020 2019 Change


3859 3682 177




2020 2019 Change









Other 1194 1135 59



Other -4534 -4317 -217

Total 15659 14680 979



28











2020 2019 Change


Total -3906 -4127 221

IT expenses -1090 -1055 -35












29




Distribution














30







Bank holdings 5862 254 5370 263 492


23043 1000 20457 1000 2586





4161 242 4538 301 -377









Funding 918 53 989 66 -71

























31


3 Net assets






Banks 5920 170 5415 184 505

Customers 802 23 1094 37 -292




617 18 1302 44 -685


3437 99 1747 60 1690





Total assets 34851 1000 29357 1000 5494



Liabilities to

Banks 301 09 269 09 32

Customers 15 00 12 00 03


Provisions 2574 74 2287 78 287





Equity 17882 513 15545 530 2337












32



31 Dec 2020

EUR million

31 Dec 2019

EUR million

Change

EUR million




856 737 119



Total 2574 2287 287











33














34





2020 2019















35



















36




II Report on risks













37




















asat31December2020

38












39









40


III Forecast


























42




UMH Group Note 2020

EUR thousand

2019

EUR thousand





[27] -17 -54


6210 6201






[30] -83179 -43410


[31] 4603 33871




Income taxes [24] [34] -189224 -169674


Attributableto


450752 472330



UMH Group Note 2020

EUR thousand

2019

EUR thousand





[35][36][56] ndash shy8


[36][56] -4608 1663


[36] ndash 0



[36][56] -116 1882


-14793 -12676


[36] -2661 7281


Attributableto


428842 470789


43




EUR thousand

31 Dec 2019

EUR thousand







[13] [42] 61743 130187




Other assets [46] 217419 217063



Total assets 3485066 2935706


EUR thousand

31 Dec 2019

EUR thousand




Provisions [20] [21] [52] 257382 228659




Equity [56] 1788159 1554526









44




Retained earnings



reserve


for sale



trolling interests

Non-con-trolling

interests

Total equity


1 Jan 2019 87130 18617 843017 18701 11148 -3500 339059 1314172 24077 1338249










31 Dec 2019 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526

1 Jan 2020 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526










31 Dec 2020 87130 18617 1171839 20362 8203 ndash 450752 1756903 31256 1788159

45


UMH Group 2020

EUR thousand

2019

EUR thousand




143363 96788





Subtotal 1459979 1344817













UMH Group 2020

EUR thousand

2019

EUR thousand
















-207092 -253397










46








47























48























49





























50



[5] Estimates





















51































52





























53

















Embeddedderivatives








54











[9] Cash reserve















55



























56





















57

















[23] Income











58





[24] Income taxes
















59



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









168 ndash 168





Total 6227 6255 -28



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash ndash ndash






ndash ndash ndash


-17 -54 37






1 1 ndash







ndash ndash ndash

Total -17 -54 37



60



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Other 119407 113493 5914





Other shy105323 -75311 shy30012

Total 1565889 1467998 97891









61



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-5018 2443 -7461


shy5018 2443 -7461


48496 ndash 48496


48496 ndash 48496

Total 43478 2443 41035


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-96954 -58311 -38643


-95487 shy52850 -42637


-1467 -5461 3994


13775 14901 -1126


13775 14901 -1126


13775 14901 -1126

Total -83179 -43410 -39769

62



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Associates -1266 27293 -28559

Total 4603 33871 -29268


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Staff costs -451965 -428002 -23963




-15718 -14714 shy1004







Miscellaneous -100562 -106424 5862





Total -919094 -909448 -9646


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



16354 11839 4515



975 ndash 975


671 176 495









shy994 -474 shy520


-277 shy331 54






ndash 73006 -73006


ndash 73006 -73006

Total 31508 92531 -61023

63


[34] Income taxes


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



Total -189224 -169674 -19550


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




203007 203248 -241


-22674 -41169 18495


4371 5936 -1565



-6128 -4274 shy1854



-1687 shy914 -773


4937 256 4681


Other 2813 1340 1473




64






65




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1655 -6263


ndash 0 0


-4608 1655 -6263


ndash shy8 8


ndash 0 0


ndash -8 8


-4608 1663 -6271


ndash ndash ndash


-4608 1663 -6271


-14909 -10794 -4115


-2661 7281 -9942

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17570 -3513 -14057


-116 1882 shy1998


-76 shy21 shy55


-192 1861 -2053


-14793 -12676 -2117


shy2585 7302 -9887


-17378 -5374 -12004



-2661 7281 -9942


66


[37] Cash reserve

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 44 17 27


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





Total 592026 541495 50531



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



38264 42663 -4399

Total 80211 109442 -29231





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 1743050 1503473 239577


67




securities


Total



Cost as at 1 Jan 2019 990683 6650 997333

Additions 840727 2239 842966




Cost as at 31 Dec 2019 1480039 8889 1488928


-15478 16197 719


607 1275 1882


12431 ndash 12431




0 ndash 0


-2927 17472 14545



securities


Total


Cost as at 1 Jan 2020 1480039 8889 1488928

Additions 812030 50 812080


Disposals -614498 shy50 -614548


Cost as at 31 Dec 2020 1677573 40635 1718208


-2927 17472 14545


1187 shy1303 -116


15510 ndash 15510




8673 16169 24842


68



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 61743 130187 -68444





Total




2348 17166 19514


shy4230 -10127 -14357





shy5052 -13717 -18769


shy10921 shy12451 -23372






69



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 36708 25440 11268


Land and buildings


equipment

Total



Cost as at 1 Jan 2019 25650 22983 48633

Additions 3271 4693 7964



Cost as at 31 Dec 2019 28921 24938 53859


-11319 -15027 -26346





-12575 -15844 -28419


Land and buildings


equipment

Total


Cost as at 1 Jan 2020 28921 24938 53859

Additions 9310 4514 13824



Cost as at 31 Dec 2020 32325 26780 59105


-12575 -15844 -28419






-7704 -14693 -22397




70



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 306954 149300 157654


71





software

Purchased customer

relationships


assets

Total



















Cost as at 31 Dec 2020 98778 406076 1987 68056 45181 620078











72



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Germany 20070 2242 17828




207959 117651 90308


51019 43333 7686

Netting -177162 -78438 -98724

Total 107334 90450 16884





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



0 96 -96










Total 258978 160984 97994

73


[46] Other assets

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








108 ndash 108


12280 11011 1269


Total 217419 217063 356



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



5329 5938 -609

Total 300359 102963 197396



Land and buildings


equipment

Total



Additions 2939 1888 4827







18532 ndash 18532

Additions 167853 2580 170433






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 39218 37740 1478

74



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 30101 26884 3217


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 1525 1167 358


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 179852 96641 83211

[52] Provisions

31 Dec 2020

EUR thousand

31122019

EUR thousand

Change

EUR thousand



153334 137642 15692


85604 73726 11878


35671 21737 13934


49933 51989 -2056



559 556 3



Total 257382 228659 28723



75




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Germany 393413 358527 34886






Total 401032 365499 35533






2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









12155 28702 -16547



31 Dec 2020

31 Dec 2019

Change

Percentage points






76




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533


shy43339 shy40154 shy3185


58658 54234 4424


4788 3313 1475


shy4545 shy5134 589


6630 5831 799


-6309 shy5554 -755


7132 6352 780


-7327 -6540 -787


Plan assets


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533







153334 137642 15692



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




10175 25955 -15780






77







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


148376 133815 14561


571 500 71


Total 247806 227857 19949

Reimbursementrights


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




shy538 189 -727









Total



Additions 1087 1087




20 20


78



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






162120 73284 88836


17918 7129 10789

Netting -177162 -78438 -98724

Total 59931 68506 -8575




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



1613 346 1267










Total 180038 80413 99625

79



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






ndash 5000 -5000






Total 865695 855183 10512


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 302421 104140 198281

[56] Equity

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








Total 1788159 1554526 233633

Issued capital




Capital reserves


80


Retained earnings



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17168 -4997 -12171

Total -17168 -4997 -12171




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-134 1801 -1935

Total -134 1801 -1935




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1663 -6271

Total -4608 1663 -6271




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash -8 8

Total ndash -8 8




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-57 61 -118


-211 -378 167

Total -268 -317 49

81




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






44651 40663 3988






1726054 1539905 186149






64108 32477 31631



7304 6116 1188



179852 101641 78211



ndash 5000 shy5000




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




Total 64108 32478 31630


82




31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand











83



31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand













84





EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















85



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















86



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand





















87



Netgainsandlosses


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-81081 -33073 -48008


shy81081 -33073 shy48008


1398 1607 -209


1398 1607 shy209







2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



-1605 -2109 504

[61] Fair values





88



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





80211 109442 shy29231










EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










ndash 5000 shy5000


ndash 5000 shy5000

89





Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand











ofwhichlevel2 1674495 1462924 211571

ofwhichlevel3 68555 40550 28005





Total 1790162 1572382 217780


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 179852 87165 92687



ndash 5000 -5000




Total 179852 101641 78211




90


Reclassifications






EUR thousand

2019

EUR thousand

Change

EUR thousand



1615 -20787 22402





EUR thousand

2019

EUR thousand

Change

EUR thousand





shy3803 2133 -5936







EUR thousand

2019

EUR thousand

Change

EUR thousand



4415 1638 2777





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






91







Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 584132 538462 45670








ofwhichlevel2 180667 170528 10139


Total 845010 818432 26578

92



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand













Total 44651 46443 -1792




Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 591927 541487 50440







Up to one month 70417 96465 -26048



















Indefinite 1743050 1503473 239577

93


Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 171443 167897 3546





Indefinite 3 6 shy3







Indefinite 39218 37740 1478


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 30101 26884 3217



























94



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ndash 5000 ndash

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









95



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

























Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 3720 5651 -1931

96



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

















Total 5533 6818 -1285


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 50827 55749 -4922


97


Other disclosures





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Revenue elements





Other 119407 113493 5914




Germany 2147713 2053096 94617





At a point in time 448874 429405 19469





98






banks

EUR thousand


customers

EUR thousand

Other receivables

EUR thousand

Total

EUR thousand

As at 1 Jan 2019 5063 83485 137579 226127

Additions 41840 436126 2251938 2729904



Other 1 6 11 18

As at 31 Dec 2019 4462 109405 166508 280375

As at 1 Jan 2020 4462 109405 166508 280375

Additions 47608 399016 2358694 2805318

Disposals -46252 -430077 -2349187 -2825516


Other 4 1540 952 2496

As at 31 Dec 2020 5822 79866 176967 262655








99

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 31257 23779 7478


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 9439 8182 1257

100






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 404645 352739 51906

Liabilities 202837 169876 32961

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 1 -4 5

101














31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 44155 36694 7461


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






102







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 76536 84644 -8108

Liabilities 44218 47621 -3403

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 0 -5 5






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 17676 17778 -102


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






103
















31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 66992 75747 -8755


Liabilities -9019 -12266 3247


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-15928 -14662 -1266

Income taxes -2160 -2428 268




104



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Goodwill 25601 27955 shy2354


54008 59060 -5052


Other associates



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


3699 2278 1421


ndash ndash ndash










105


Unrecognised losses



Nature of interests















106




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

31 Dec 2020

Number

31 Dec 2019

Number

Mutual funds 198731859 184703333 341 334


789858 1702590 14 25

Special fund 125070213 116299113 426 418



Total 323802072 301002446 767 752


789858 1702590 14 25



ofwhichguarantee

funds

ofwhichguarantee

funds

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1941168 27 33183 ndash 1974351












1857481 -11761 33180 ndash 1890661



744892 744892 ndash ndash 744892





2602373 733131 33180 ndash 2635553


107



ofwhichguarantee

funds

ofwhichguarantee

fund

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1701823 69 31944 ndash 1733767












1644906 -10096 31939 ndash 1676845



1573585 1573585 ndash ndash 1573585





3218491 1563489 31939 ndash 3250430






2020 financial year



commission income




profit or loss












Total 2507607 7297 8758 2523662 ndash



108


2019 financial year



commission income




profit or loss












Total 2362690 8180 17345 2388215 ndash







Volume Number

31122020

EUR thousand

31122019

EUR thousand

31122020

Number

31122019

Number





109



Nature of support





















Banks





Finance companies


Service companies






Other subsidiaries




110














490 ndash

































111
















112



31 Oct 2020

EUR thousand


Cash reserve 9





Other assets 27365


Provisions 2439











[72] Leases

UMH Group as lessee





113



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-4632 -4360 -272


Total -44694 -41063 -3631




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





59744 173220 -113476

Total 421547 484942 -63395



UMH Group as lessor

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


23 83 -60








23 83 -60









114




2020

Number

2019

Number

Change

Number












[75] Auditor fees


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Total 1325 2178 -853




115









Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










Other assets 13717 13440 277








116



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



















EUR thousand

2019

EUR thousand

Change

EUR thousand



























117



EUR thousand

2019

EUR thousand

Change

EUR thousand








EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




45 45 ndash


2579 2242 337

Total 17483 14593 2890








118










UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember








Name Position(s)














119



Name Position(s)





Name Position(s)






























120








121
















122













123










124



Shareholders


7232


2425


343

Asat10March2021















UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember





125


Advisory Board





































Asat10March2021

126








Employees 160





Aboutthisreport 176

GRIIndex 177

127




128







129


The company






102-2

102-6

102-6

102-4







102-23

102-22

102-24


102-5

130






102-25

131






102-29

102-11

102-14





102-15


132





102-16

Our values






133








102-18

102-31

102-27

102-32

102-33

102-34

102-28

102-30

102-31






102-18

102-19

102-20

102-26


134











102-46

102-47

103-1

103-2






102-42

102-43

102-44

135





102-40

30

2018

7

5

4

4

33

2 1


136



10

30

50

40

20

50 40 2030 10

Society


Productsservices

Rel

evan

ce t

o e

mp

loye

es a

nd

man

ager

s



Unimportant








415-1

102-12

102-13

137








417-1

G4-FS15

G4-FS2












3859 billion euros

138


57

270

34

420163

55

52

18

22

77

17824

14 3123 57

28

3842

60

2085

24

15

28

7 13

11




53 Engagement





203-1

G4-FS5



G4-FS10


2020 1938 votes


139









G4-FS11








140











141







2018 2019 2020

Numberofproperties


Numberofproperties


Numberofproperties


148 63 155 66 216 70






142








143











144













145










Total 281 6130713 100






Total 230 6220830 100






Total 287 7382628 100







Total 358 7553524 100






Total 326 8278251 100






Total 379 9647660 100

146











Total portfolio

Total portfolio

Total portfolio

2019

2018

2017

2017

19

81

2017

22

78

2019

23

77

2019

24

76

2018

25

75

2018

29

71

48

50

51

42

46

48

34

31

28

30

32

28

11

9

12

12

11

13

7

9

9

16

11

11


147





2017(358

properties)

2018(326

properties)

2019(379

properties)











[kWh(msup2a)] 226 227 231










Portfolio under

review

Office buildings

Retail buildings

Hotel buildings

Logistics buildings


[kWh(msup2a)]

223 231 217 262 63


[kg CO2(msup2a)]

57 51 63 74 21


[msup3 (msup2a)]

069 063 068 147 005








148










2017

9

91

2019

11

89

2018

10

90

1620 1614 1633

149







2017

3

16

34

47

2019

3

14

37

46

2018

3

15

34

47

1620 1614 1633

2017

758

2018

755

2019

753


2017

553

2018

553

2019

603

Retail buildings

2017

254

2018

250

2019

232

Hotel buildings

2017

55

2018

56

2019

45

Logistics buildings

150



bytypeofconsumption






2017

63

37

2019

65

35

2018

64

36

226 227 231228 228

42 41

58 59

2017

242

2018

243

2019

237


2017

223

2018

225

2019

244

Retail buildings

2017

295

2018

290

2019

276

Hotel buildings

2017

69

2018

72

2019

67

Logistics buildings

43

2049

4257

80

51

58

2255

39

2452

42

78

45

61

7648

58

151




305-3




2017

8

92

2019

9

91

2018

6

94

434918 434744 450307


305-3

152







2017

4

17

39

40

2019

4

15

42

39

2018

4

15

38

43

434918 434744 450307

2017

173633

2018

185425

2019

177266


2017

170665

2018

165425

2019

187728

Retail buildings

2017

72862

2018

67372

2019

68563

Hotel buildings

2017

17758

2018

16522

2019

16749

Logistics buildings

153



bytypeofconsumption



bytypeofconsumption



2017

74

26

2019

77

23

2018

74

26

56 58 63

59 59

65 67

35 33

2017 2018 2019


2017

66

2018

65

2019

72

Retail buildings

2017

78

2018

76

2019

77

Hotel buildings

2017

21

2018

20

2019

21

Logistics buildings

68

82

69

7632

18

31

24

85

67

78

85

67

79

15

33

2215

33

21

51 52 56

154







2017

1

30

38

37

2019

1

26

42

32

2018

1

30

38

31

4518574 4506013 4403141

2017

1386013

2018

1382160

2019

1416601


2017

1732593

2018

1727777

2019

1829872

Retail buildings

2017

1363573

2018

1359782

2019

1123207

Hotel buildings

2017

36395

2018

36294

2019

33462

Logistics buildings

303-1

155








2017 20192018

057 057 056057

2017 2018 2019 2017

067

2018

065

2019

063

2017

146

2018

144

2019

140

2017

004

2018

004

2019

004

039 039 040

057


156







2017

11

16

40

34

2019

11

13

39

37

2018

11

16

40

33

52380 52365 54186

2017

17587

2018

17782

2019

19808

2017

20893

2018

22515

2019

21075

2017

8253

2018

8141

2019

7104

2017

5647

2018

5749

2019

6199


157




67 67



2017

54

17

16

13

2019

60

49

11 14

1424

15 13

2018

59

15

14

12

66 65 70

2017

50

2018

51

2019

56

2017

81

2018

80

2019

83

2017

88

2018

74

2019

85

2017

67

2018

70

2019

77

5658

59

13 1323

19 17 10

12 12 16

6057

35

39 59

77 8079

23

14

15

183

5 41

11

13

18

19 13

7 67

715

3224 25

11 10 13


158










Total 263 6852618 100







2018 2018

64

71

3629

2019 2019

65

71

3529

228 560227 550227 590

159






2018 2018

54

18

15

15

2019 2019

53

18

16

13

056 66056 67057 67





160


61 HR strategy





404-3


6 Employees


Male 1796 145 1941

Female 1362 125 1487

Total 3158 270 3428


Male 1729 212 1941

Female 822 665 1487

Total 2551 877 3428



Male 43 67 20 130

Female 30 40 8 78

Total 73 107 28 208



Male 6 35 10 51

Female 10 23 2 35

Total 16 58 12 86



Male 280 304 174 263

Female 498 251 054 235

Total 386 280 127 251

102-8

401-1

401-1

401-1

161









403-2

403-3













404-1

404-2

162


65 Diversity











102-35

401-2

102-41

405-2

Employee diversity


Male 214 1152 575 1941 566

Female 201 916 370 1487 434

Total 415 2068 945 3428 1000




405-1

405-1

163





102-36

102-21

201-3

164












201-2

165
















301-1301-2

302-1302-3 2018 2020

Type of energy

Consumption in MJ


[MJFTE2]

Consumption in MJ


year in MJ


[MJFTE2]

Petrol 186709 64 358724 -172014 11457

Diesel 21343447 7332 18063715 3279732 576931

Naturalgas 13338587 4582 14383066 -1044479 459376


Electricity 35520015 12202 31520221 3999794 1006714

Total 81597741 28030 74935498 6662243 2393341




2019 2020




306-1303-1

302-4

166




302-2



CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


29922 20599 279 6579 9323 3116

Naturalgas 16052 3242 44 1035 12810 7980




69298 4627 63 1478 64671 9332

Paper consumption

13851 5574 76 1780 8277 5976


36213 8297 112 2650 27916 7709

Watersupply 194 226 03 72 -32 -1631

Hotel accommodation

684 1454 20 464 -770 -11254


Workingfromhome

0 1280 17 409 -1280 shy

Letters 6217 28 00 09 6189 9956

Parcels 1164 00 00 00 1164 10000

Waste 1156 1311 18 419 -155 -1339

Events 35671 14154 192 4521 21517 6032

Toner consumption

507 120 02 38 387 7624

Total 233806 73793 1000 23569 160013 6844




CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


692985 453541 144855 239444 3455

Total sup2 2338060 1145200 365762 1192860 5102


305-1305-2305-3305-4305-5

305-5






Glasswaste(t) 26 28


Other








306-2

167




Flight 10367201 2151090

Cars 1224621 447442

Rail 5199039 1448478









168



81 Human rights














205-1

205-2

102-17

205-3

206-1

169




170








308-1

414-1

102-9

308-2









414-2

409-1

407-1

204-1

102-10


171







2022



2021 Extended







Communication



2022


2021 New


2021 New


2022 New


2022 New


2022 New

172


Environment



2022


2022 New


2021 New


2022 New


2022





2025 New


2021 New


2022


2022 On schedule


2022 On schedule


2022 On schedule

Employees



2022



2021 New



2020 Completed




2020 Completed


2022 On schedule


173


Society



2022


2020 Completed


2020 Extended



2022


2021 On schedule


2021 On schedule


2021 New


2022








2022


2020 Completed


2021 On schedule


2022 New


2022


2020 Completed





174


Retail clients



2022



2021 On schedule


2022 On schedule


2022 On schedule


2025 New



2021 On schedule


2022 On schedule


2020 Completed


2020 Completed


2021 New


2021 New





2020 Completed








2020 Completed


175


Real estate




2020 Completed




2022


2025 On schedule


2025 On schedule


2020 Completed


2020 Completed


2025 On schedule


2022


2020 Completed


2020 Completed


Fund services



New


2021 New


2021 New

176






102-45

102-50

102-54






177


12 GRI Index












Seepage160



Seepage170




Strategy




Seepage131




Seepage132


Seepage168


Governance





Seepage133


Seepage163


Seepage129



Seepage129



Seepage133


Seepage133


Seepage133


Seepage131


Seepage133


Seepage133


Seepage133



Seepage133



178













Seepage134










Seepage176







Seepage134




Economy





Seepage164


Seepage163


None



Seepage138



Seepage170



Seepage168


Seepage168


Seepage168



Seepage168

179



Environment




GRI 302 Energy 2016


Seetableonpage165


Seepage166



GRI 303 Water 2016










Seepage165




Seepage170


Seepage170


Social



Seetableonpage160


Seepage162



Seepage161


Seepage161



Seetableonpage161


Seepage161


Seepage160



Seetableonpage162


Seepage162



None



Seepage170



Seepage170

180





Seepage170


Seepage170





Seepage137


None


None



None



None





G4- DMA (FS2)


Seepage137

G4- DMA (FS5)


Seepage138


Active ownership

G4-FS10


Seepage138

G4-FS11


Seepage139

G4-FS12




G4-DMA (FS15)


Seepage137

Energy G4-CRE1


Water G4-CRE2


Emissions G4-CRE3


Seetableonpage147


G4-CRE8


Seetableonpage147




4








Imprint 181

5








Happy reading


Foreword


6




















7




















9



Note



10















11




Asset management

companies





PropertyGmbH


Banks


Service companies




ZBIImmobilien AG


Other subsidiaries


GmbH



VisualVestGmbH

Financial companies


Associates

R+VPensionsfondsAG



mentmbH

Asset management

companies



Hongkong


AustriaAGWien



GmbHWien

Securities trading

companies


attraxSA Luxemburg



Segments


Segment

Fund Services

Segment

Infrastructure

Segments



Support services







12






13


B Economic report


11 Capital markets





1 hard currencies



Equities


Bonds Commodities

Germany

35

-363

625

Eurozone

-363

-51

489

USA

163

-307

679

Japan

160

-300

658

China

272

-138

476

EmMarkets

166

-273

603

Federal bonds

0811

-03

Euro government

bonds

50

-20

72

Euroshy Corporates

26

-71

105

Euroshy High Yield

28

-194

275

EM government

bonds1

53

-189

298

Brent

-659

1296

Gold

248

-30

-217

287

Copper

260

-248

675

14







2019 2020 2021 2019 2020 2021

GermanyGermany

06

-56

33

13

03

13

EurozoneEurozone

13

-71

44

12

03

07

USAUSA

23

-36

36

18

12

17

JapanJapan

07

-53

29

05

00 00

ChinaChina

61

19

85

29

25

15

15














16

















Fund assets 347269669 327829763 19439906






Total 385934584 368208391 17726193

17












-392004 -1122029 730025

Total 15110740 19372677 -4261937





Mutual funds 220988398 210056614 10931784

Equityfunds 59385668 56216994 3168674



Mixedfunds 65178950 59300085 5878865






Hybridfunds 1343282 866130 477152

Special fund 126281271 117773149 8508122

Equityfunds 704307 631657 72650


Mixedfunds 81237722 76213675 5024047





Total 347269669 327829763 19439906

18











(figuresin)


Equityfunds

58

86

28



04

30

26


Money marketbonds

0ndash112

09

-03


Mixedfunds

23

40

17



08

-13

-21


19


















AuM Netsales

2019 20192020 2020

1604

2078

1738

2121

81 113

+8

+2

88 63

20


















134

216

126

17


Mutual funds

Special funds

Other formats

21
















22

















23













1 Retail Clients








24
















25







3 2021 outlook

31RetailClients







26






27




2020 2019 Change




-17 -12 -05


89 98 -09



0 -01 01


62 62 ndash







-832 -434 -398


46 339 -293


Staffcosts -4519 -4280 -239






Income taxes -1892 -1697 -195


Attributableto


4508 4723 -215


2020 2019 Change


3859 3682 177




2020 2019 Change









Other 1194 1135 59



Other -4534 -4317 -217

Total 15659 14680 979



28











2020 2019 Change


Total -3906 -4127 221

IT expenses -1090 -1055 -35












29




Distribution














30







Bank holdings 5862 254 5370 263 492


23043 1000 20457 1000 2586





4161 242 4538 301 -377









Funding 918 53 989 66 -71

























31


3 Net assets






Banks 5920 170 5415 184 505

Customers 802 23 1094 37 -292




617 18 1302 44 -685


3437 99 1747 60 1690





Total assets 34851 1000 29357 1000 5494



Liabilities to

Banks 301 09 269 09 32

Customers 15 00 12 00 03


Provisions 2574 74 2287 78 287





Equity 17882 513 15545 530 2337












32



31 Dec 2020

EUR million

31 Dec 2019

EUR million

Change

EUR million




856 737 119



Total 2574 2287 287











33














34





2020 2019















35



















36




II Report on risks













37




















asat31December2020

38












39









40


III Forecast


























42




UMH Group Note 2020

EUR thousand

2019

EUR thousand





[27] -17 -54


6210 6201






[30] -83179 -43410


[31] 4603 33871




Income taxes [24] [34] -189224 -169674


Attributableto


450752 472330



UMH Group Note 2020

EUR thousand

2019

EUR thousand





[35][36][56] ndash shy8


[36][56] -4608 1663


[36] ndash 0



[36][56] -116 1882


-14793 -12676


[36] -2661 7281


Attributableto


428842 470789


43




EUR thousand

31 Dec 2019

EUR thousand







[13] [42] 61743 130187




Other assets [46] 217419 217063



Total assets 3485066 2935706


EUR thousand

31 Dec 2019

EUR thousand




Provisions [20] [21] [52] 257382 228659




Equity [56] 1788159 1554526









44




Retained earnings



reserve


for sale



trolling interests

Non-con-trolling

interests

Total equity


1 Jan 2019 87130 18617 843017 18701 11148 -3500 339059 1314172 24077 1338249










31 Dec 2019 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526

1 Jan 2020 87130 18617 919363 20496 12811 ndash 472330 1530747 23779 1554526










31 Dec 2020 87130 18617 1171839 20362 8203 ndash 450752 1756903 31256 1788159

45


UMH Group 2020

EUR thousand

2019

EUR thousand




143363 96788





Subtotal 1459979 1344817













UMH Group 2020

EUR thousand

2019

EUR thousand
















-207092 -253397










46








47























48























49





























50



[5] Estimates





















51































52





























53

















Embeddedderivatives








54











[9] Cash reserve















55



























56





















57

















[23] Income











58





[24] Income taxes
















59



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









168 ndash 168





Total 6227 6255 -28



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash ndash ndash






ndash ndash ndash


-17 -54 37






1 1 ndash







ndash ndash ndash

Total -17 -54 37



60



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Other 119407 113493 5914





Other shy105323 -75311 shy30012

Total 1565889 1467998 97891









61



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-5018 2443 -7461


shy5018 2443 -7461


48496 ndash 48496


48496 ndash 48496

Total 43478 2443 41035


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-96954 -58311 -38643


-95487 shy52850 -42637


-1467 -5461 3994


13775 14901 -1126


13775 14901 -1126


13775 14901 -1126

Total -83179 -43410 -39769

62



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


Associates -1266 27293 -28559

Total 4603 33871 -29268


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Staff costs -451965 -428002 -23963




-15718 -14714 shy1004







Miscellaneous -100562 -106424 5862





Total -919094 -909448 -9646


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



16354 11839 4515



975 ndash 975


671 176 495









shy994 -474 shy520


-277 shy331 54






ndash 73006 -73006


ndash 73006 -73006

Total 31508 92531 -61023

63


[34] Income taxes


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



Total -189224 -169674 -19550


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




203007 203248 -241


-22674 -41169 18495


4371 5936 -1565



-6128 -4274 shy1854



-1687 shy914 -773


4937 256 4681


Other 2813 1340 1473




64






65




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1655 -6263


ndash 0 0


-4608 1655 -6263


ndash shy8 8


ndash 0 0


ndash -8 8


-4608 1663 -6271


ndash ndash ndash


-4608 1663 -6271


-14909 -10794 -4115


-2661 7281 -9942

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17570 -3513 -14057


-116 1882 shy1998


-76 shy21 shy55


-192 1861 -2053


-14793 -12676 -2117


shy2585 7302 -9887


-17378 -5374 -12004



-2661 7281 -9942


66


[37] Cash reserve

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 44 17 27


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





Total 592026 541495 50531



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



38264 42663 -4399

Total 80211 109442 -29231





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 1743050 1503473 239577


67




securities


Total



Cost as at 1 Jan 2019 990683 6650 997333

Additions 840727 2239 842966




Cost as at 31 Dec 2019 1480039 8889 1488928


-15478 16197 719


607 1275 1882


12431 ndash 12431




0 ndash 0


-2927 17472 14545



securities


Total


Cost as at 1 Jan 2020 1480039 8889 1488928

Additions 812030 50 812080


Disposals -614498 shy50 -614548


Cost as at 31 Dec 2020 1677573 40635 1718208


-2927 17472 14545


1187 shy1303 -116


15510 ndash 15510




8673 16169 24842


68



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 61743 130187 -68444





Total




2348 17166 19514


shy4230 -10127 -14357





shy5052 -13717 -18769


shy10921 shy12451 -23372






69



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 36708 25440 11268


Land and buildings


equipment

Total



Cost as at 1 Jan 2019 25650 22983 48633

Additions 3271 4693 7964



Cost as at 31 Dec 2019 28921 24938 53859


-11319 -15027 -26346





-12575 -15844 -28419


Land and buildings


equipment

Total


Cost as at 1 Jan 2020 28921 24938 53859

Additions 9310 4514 13824



Cost as at 31 Dec 2020 32325 26780 59105


-12575 -15844 -28419






-7704 -14693 -22397




70



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






Total 306954 149300 157654


71





software

Purchased customer

relationships


assets

Total



















Cost as at 31 Dec 2020 98778 406076 1987 68056 45181 620078











72



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Germany 20070 2242 17828




207959 117651 90308


51019 43333 7686

Netting -177162 -78438 -98724

Total 107334 90450 16884





31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



0 96 -96










Total 258978 160984 97994

73


[46] Other assets

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








108 ndash 108


12280 11011 1269


Total 217419 217063 356



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



5329 5938 -609

Total 300359 102963 197396



Land and buildings


equipment

Total



Additions 2939 1888 4827







18532 ndash 18532

Additions 167853 2580 170433






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Total 39218 37740 1478

74



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 30101 26884 3217


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 1525 1167 358


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 179852 96641 83211

[52] Provisions

31 Dec 2020

EUR thousand

31122019

EUR thousand

Change

EUR thousand



153334 137642 15692


85604 73726 11878


35671 21737 13934


49933 51989 -2056



559 556 3



Total 257382 228659 28723



75




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Germany 393413 358527 34886






Total 401032 365499 35533






2020

EUR thousand

2019

EUR thousand

Change

EUR thousand









12155 28702 -16547



31 Dec 2020

31 Dec 2019

Change

Percentage points






76




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533


shy43339 shy40154 shy3185


58658 54234 4424


4788 3313 1475


shy4545 shy5134 589


6630 5831 799


-6309 shy5554 -755


7132 6352 780


-7327 -6540 -787


Plan assets


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


401032 365499 35533







153334 137642 15692



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




10175 25955 -15780






77







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


148376 133815 14561


571 500 71


Total 247806 227857 19949

Reimbursementrights


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




shy538 189 -727









Total



Additions 1087 1087




20 20


78



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






162120 73284 88836


17918 7129 10789

Netting -177162 -78438 -98724

Total 59931 68506 -8575




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets



1613 346 1267










Total 180038 80413 99625

79



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






ndash 5000 -5000






Total 865695 855183 10512


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Total 302421 104140 198281

[56] Equity

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand








Total 1788159 1554526 233633

Issued capital




Capital reserves


80


Retained earnings



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-17168 -4997 -12171

Total -17168 -4997 -12171




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-134 1801 -1935

Total -134 1801 -1935




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-4608 1663 -6271

Total -4608 1663 -6271




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


ndash -8 8

Total ndash -8 8




2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-57 61 -118


-211 -378 167

Total -268 -317 49

81




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand






44651 40663 3988






1726054 1539905 186149






64108 32477 31631



7304 6116 1188



179852 101641 78211



ndash 5000 shy5000




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand




Total 64108 32478 31630


82




31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2020

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand











83



31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand


























31 Dec 2019

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Stage 1

EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

EUR thousand













84





EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















85



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















86



EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand



















EUR thousand

Stage 2

EUR thousand

Stage 3

EUR thousand

Total

EUR thousand





















87



Netgainsandlosses


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


-81081 -33073 -48008


shy81081 -33073 shy48008


1398 1607 -209


1398 1607 shy209







2020

EUR thousand

2019

EUR thousand

Change

EUR thousand



-1605 -2109 504

[61] Fair values





88



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





80211 109442 shy29231










EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










ndash 5000 shy5000


ndash 5000 shy5000

89





Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand











ofwhichlevel2 1674495 1462924 211571

ofwhichlevel3 68555 40550 28005





Total 1790162 1572382 217780


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 179852 87165 92687



ndash 5000 -5000




Total 179852 101641 78211




90


Reclassifications






EUR thousand

2019

EUR thousand

Change

EUR thousand



1615 -20787 22402





EUR thousand

2019

EUR thousand

Change

EUR thousand





shy3803 2133 -5936







EUR thousand

2019

EUR thousand

Change

EUR thousand



4415 1638 2777





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






91







Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



ofwhichlevel2 584132 538462 45670








ofwhichlevel2 180667 170528 10139


Total 845010 818432 26578

92



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand













Total 44651 46443 -1792




Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 591927 541487 50440







Up to one month 70417 96465 -26048



















Indefinite 1743050 1503473 239577

93


Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 171443 167897 3546





Indefinite 3 6 shy3







Indefinite 39218 37740 1478


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


Up to one month 30101 26884 3217



























94



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


ndash 5000 ndash

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









95



Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

























Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 3720 5651 -1931

96



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

















Total 5533 6818 -1285


EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









Total 50827 55749 -4922


97


Other disclosures





2020

EUR thousand

2019

EUR thousand

Change

EUR thousand

Revenue elements





Other 119407 113493 5914




Germany 2147713 2053096 94617





At a point in time 448874 429405 19469





98






banks

EUR thousand


customers

EUR thousand

Other receivables

EUR thousand

Total

EUR thousand

As at 1 Jan 2019 5063 83485 137579 226127

Additions 41840 436126 2251938 2729904



Other 1 6 11 18

As at 31 Dec 2019 4462 109405 166508 280375

As at 1 Jan 2020 4462 109405 166508 280375

Additions 47608 399016 2358694 2805318

Disposals -46252 -430077 -2349187 -2825516


Other 4 1540 952 2496

As at 31 Dec 2020 5822 79866 176967 262655








99

















EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 31257 23779 7478


31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand







Total 9439 8182 1257

100






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 404645 352739 51906

Liabilities 202837 169876 32961

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 1 -4 5

101














31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 44155 36694 7461


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






102







31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 76536 84644 -8108

Liabilities 44218 47621 -3403

2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Cash flow 0 -5 5






31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 17676 17778 -102


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






103
















31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand

Assets 66992 75747 -8755


Liabilities -9019 -12266 3247


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-15928 -14662 -1266

Income taxes -2160 -2428 268




104



31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



Goodwill 25601 27955 shy2354


54008 59060 -5052


Other associates



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand


3699 2278 1421


ndash ndash ndash










105


Unrecognised losses



Nature of interests















106




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

31 Dec 2020

Number

31 Dec 2019

Number

Mutual funds 198731859 184703333 341 334


789858 1702590 14 25

Special fund 125070213 116299113 426 418



Total 323802072 301002446 767 752


789858 1702590 14 25



ofwhichguarantee

funds

ofwhichguarantee

funds

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1941168 27 33183 ndash 1974351












1857481 -11761 33180 ndash 1890661



744892 744892 ndash ndash 744892





2602373 733131 33180 ndash 2635553


107



ofwhichguarantee

funds

ofwhichguarantee

fund

EUR thousand

EUR thousand

EUR thousand

EUR thousand

EUR thousand

Assets 1701823 69 31944 ndash 1733767












1644906 -10096 31939 ndash 1676845



1573585 1573585 ndash ndash 1573585





3218491 1563489 31939 ndash 3250430






2020 financial year



commission income




profit or loss












Total 2507607 7297 8758 2523662 ndash



108


2019 financial year



commission income




profit or loss












Total 2362690 8180 17345 2388215 ndash







Volume Number

31122020

EUR thousand

31122019

EUR thousand

31122020

Number

31122019

Number





109



Nature of support





















Banks





Finance companies


Service companies






Other subsidiaries




110














490 ndash

































111
















112



31 Oct 2020

EUR thousand


Cash reserve 9





Other assets 27365


Provisions 2439











[72] Leases

UMH Group as lessee





113



2020

EUR thousand

2019

EUR thousand

Change

EUR thousand






-4632 -4360 -272


Total -44694 -41063 -3631




31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand





59744 173220 -113476

Total 421547 484942 -63395



UMH Group as lessor

31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand


23 83 -60








23 83 -60









114




2020

Number

2019

Number

Change

Number












[75] Auditor fees


2020

EUR thousand

2019

EUR thousand

Change

EUR thousand





Total 1325 2178 -853




115









Assets 31 Dec 2020

EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand










Other assets 13717 13440 277








116



EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand



















EUR thousand

2019

EUR thousand

Change

EUR thousand



























117



EUR thousand

2019

EUR thousand

Change

EUR thousand








EUR thousand

31 Dec 2019

EUR thousand

Change

EUR thousand









2020

EUR thousand

2019

EUR thousand

Change

EUR thousand




45 45 ndash


2579 2242 337

Total 17483 14593 2890








118










UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember








Name Position(s)














119



Name Position(s)





Name Position(s)






























120








121
















122













123










124



Shareholders


7232


2425


343

Asat10March2021















UlrikeBrouziMember1




MarijaKolakMember
















Andreas TheisMember





125


Advisory Board





































Asat10March2021

126








Employees 160





Aboutthisreport 176

GRIIndex 177

127




128







129


The company






102-2

102-6

102-6

102-4







102-23

102-22

102-24


102-5

130






102-25

131






102-29

102-11

102-14





102-15


132





102-16

Our values






133








102-18

102-31

102-27

102-32

102-33

102-34

102-28

102-30

102-31






102-18

102-19

102-20

102-26


134











102-46

102-47

103-1

103-2






102-42

102-43

102-44

135





102-40

30

2018

7

5

4

4

33

2 1


136



10

30

50

40

20

50 40 2030 10

Society


Productsservices

Rel

evan

ce t

o e

mp

loye

es a

nd

man

ager

s



Unimportant








415-1

102-12

102-13

137








417-1

G4-FS15

G4-FS2












3859 billion euros

138


57

270

34

420163

55

52

18

22

77

17824

14 3123 57

28

3842

60

2085

24

15

28

7 13

11




53 Engagement





203-1

G4-FS5



G4-FS10


2020 1938 votes


139









G4-FS11








140











141







2018 2019 2020

Numberofproperties


Numberofproperties


Numberofproperties


148 63 155 66 216 70






142








143











144













145










Total 281 6130713 100






Total 230 6220830 100






Total 287 7382628 100







Total 358 7553524 100






Total 326 8278251 100






Total 379 9647660 100

146











Total portfolio

Total portfolio

Total portfolio

2019

2018

2017

2017

19

81

2017

22

78

2019

23

77

2019

24

76

2018

25

75

2018

29

71

48

50

51

42

46

48

34

31

28

30

32

28

11

9

12

12

11

13

7

9

9

16

11

11


147





2017(358

properties)

2018(326

properties)

2019(379

properties)











[kWh(msup2a)] 226 227 231










Portfolio under

review

Office buildings

Retail buildings

Hotel buildings

Logistics buildings


[kWh(msup2a)]

223 231 217 262 63


[kg CO2(msup2a)]

57 51 63 74 21


[msup3 (msup2a)]

069 063 068 147 005








148










2017

9

91

2019

11

89

2018

10

90

1620 1614 1633

149







2017

3

16

34

47

2019

3

14

37

46

2018

3

15

34

47

1620 1614 1633

2017

758

2018

755

2019

753


2017

553

2018

553

2019

603

Retail buildings

2017

254

2018

250

2019

232

Hotel buildings

2017

55

2018

56

2019

45

Logistics buildings

150



bytypeofconsumption






2017

63

37

2019

65

35

2018

64

36

226 227 231228 228

42 41

58 59

2017

242

2018

243

2019

237


2017

223

2018

225

2019

244

Retail buildings

2017

295

2018

290

2019

276

Hotel buildings

2017

69

2018

72

2019

67

Logistics buildings

43

2049

4257

80

51

58

2255

39

2452

42

78

45

61

7648

58

151




305-3




2017

8

92

2019

9

91

2018

6

94

434918 434744 450307


305-3

152







2017

4

17

39

40

2019

4

15

42

39

2018

4

15

38

43

434918 434744 450307

2017

173633

2018

185425

2019

177266


2017

170665

2018

165425

2019

187728

Retail buildings

2017

72862

2018

67372

2019

68563

Hotel buildings

2017

17758

2018

16522

2019

16749

Logistics buildings

153



bytypeofconsumption



bytypeofconsumption



2017

74

26

2019

77

23

2018

74

26

56 58 63

59 59

65 67

35 33

2017 2018 2019


2017

66

2018

65

2019

72

Retail buildings

2017

78

2018

76

2019

77

Hotel buildings

2017

21

2018

20

2019

21

Logistics buildings

68

82

69

7632

18

31

24

85

67

78

85

67

79

15

33

2215

33

21

51 52 56

154







2017

1

30

38

37

2019

1

26

42

32

2018

1

30

38

31

4518574 4506013 4403141

2017

1386013

2018

1382160

2019

1416601


2017

1732593

2018

1727777

2019

1829872

Retail buildings

2017

1363573

2018

1359782

2019

1123207

Hotel buildings

2017

36395

2018

36294

2019

33462

Logistics buildings

303-1

155








2017 20192018

057 057 056057

2017 2018 2019 2017

067

2018

065

2019

063

2017

146

2018

144

2019

140

2017

004

2018

004

2019

004

039 039 040

057


156







2017

11

16

40

34

2019

11

13

39

37

2018

11

16

40

33

52380 52365 54186

2017

17587

2018

17782

2019

19808

2017

20893

2018

22515

2019

21075

2017

8253

2018

8141

2019

7104

2017

5647

2018

5749

2019

6199


157




67 67



2017

54

17

16

13

2019

60

49

11 14

1424

15 13

2018

59

15

14

12

66 65 70

2017

50

2018

51

2019

56

2017

81

2018

80

2019

83

2017

88

2018

74

2019

85

2017

67

2018

70

2019

77

5658

59

13 1323

19 17 10

12 12 16

6057

35

39 59

77 8079

23

14

15

183

5 41

11

13

18

19 13

7 67

715

3224 25

11 10 13


158










Total 263 6852618 100







2018 2018

64

71

3629

2019 2019

65

71

3529

228 560227 550227 590

159






2018 2018

54

18

15

15

2019 2019

53

18

16

13

056 66056 67057 67





160


61 HR strategy





404-3


6 Employees


Male 1796 145 1941

Female 1362 125 1487

Total 3158 270 3428


Male 1729 212 1941

Female 822 665 1487

Total 2551 877 3428



Male 43 67 20 130

Female 30 40 8 78

Total 73 107 28 208



Male 6 35 10 51

Female 10 23 2 35

Total 16 58 12 86



Male 280 304 174 263

Female 498 251 054 235

Total 386 280 127 251

102-8

401-1

401-1

401-1

161









403-2

403-3













404-1

404-2

162


65 Diversity











102-35

401-2

102-41

405-2

Employee diversity


Male 214 1152 575 1941 566

Female 201 916 370 1487 434

Total 415 2068 945 3428 1000




405-1

405-1

163





102-36

102-21

201-3

164












201-2

165
















301-1301-2

302-1302-3 2018 2020

Type of energy

Consumption in MJ


[MJFTE2]

Consumption in MJ


year in MJ


[MJFTE2]

Petrol 186709 64 358724 -172014 11457

Diesel 21343447 7332 18063715 3279732 576931

Naturalgas 13338587 4582 14383066 -1044479 459376


Electricity 35520015 12202 31520221 3999794 1006714

Total 81597741 28030 74935498 6662243 2393341




2019 2020




306-1303-1

302-4

166




302-2



CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


29922 20599 279 6579 9323 3116

Naturalgas 16052 3242 44 1035 12810 7980




69298 4627 63 1478 64671 9332

Paper consumption

13851 5574 76 1780 8277 5976


36213 8297 112 2650 27916 7709

Watersupply 194 226 03 72 -32 -1631

Hotel accommodation

684 1454 20 464 -770 -11254


Workingfromhome

0 1280 17 409 -1280 shy

Letters 6217 28 00 09 6189 9956

Parcels 1164 00 00 00 1164 10000

Waste 1156 1311 18 419 -155 -1339

Events 35671 14154 192 4521 21517 6032

Toner consumption

507 120 02 38 387 7624

Total 233806 73793 1000 23569 160013 6844




CO2 in tonnes

CO2 in tonnes

Percentage []


[kgFTE]

CO2 in tonnes

Reduction []


692985 453541 144855 239444 3455

Total sup2 2338060 1145200 365762 1192860 5102


305-1305-2305-3305-4305-5

305-5






Glasswaste(t) 26 28


Other








306-2

167




Flight 10367201 2151090

Cars 1224621 447442

Rail 5199039 1448478









168



81 Human rights














205-1

205-2

102-17

205-3

206-1

169




170








308-1

414-1

102-9

308-2









414-2

409-1

407-1

204-1

102-10


171







2022



2021 Extended







Communication



2022


2021 New


2021 New


2022 New


2022 New


2022 New

172


Environment



2022


2022 New


2021 New


2022 New


2022





2025 New


2021 New


2022


2022 On schedule


2022 On schedule


2022 On schedule

Employees



2022



2021 New



2020 Completed




2020 Completed


2022 On schedule


173


Society



2022


2020 Completed


2020 Extended



2022


2021 On schedule


2021 On schedule


2021 New


2022








2022


2020 Completed


2021 On schedule


2022 New


2022


2020 Completed





174


Retail clients



2022



2021 On schedule


2022 On schedule


2022 On schedule


2025 New



2021 On schedule


2022 On schedule


2020 Completed


2020 Completed


2021 New


2021 New





2020 Completed








2020 Completed


175


Real estate




2020 Completed




2022


2025 On schedule


2025 On schedule


2020 Completed


2020 Completed


2025 On schedule


2022


2020 Completed


2020 Completed


Fund services



New


2021 New


2021 New

176






102-45

102-50

102-54






177


12 GRI Index












Seepage160



Seepage170




Strategy




Seepage131




Seepage132


Seepage168


Governance





Seepage133


Seepage163


Seepage129



Seepage129



Seepage133


Seepage133


Seepage133


Seepage131


Seepage133


Seepage133


Seepage133



Seepage133



178













Seepage134










Seepage176







Seepage134




Economy





Seepage164


Seepage163


None



Seepage138



Seepage170



Seepage168


Seepage168


Seepage168



Seepage168

179



Environment




GRI 302 Energy 2016


Seetableonpage165


Seepage166



GRI 303 Water 2016










Seepage165




Seepage170


Seepage170


Social



Seetableonpage160


Seepage162



Seepage161


Seepage161



Seetableonpage161


Seepage161


Seepage160



Seetableonpage162


Seepage162



None



Seepage170



Seepage170

180





Seepage170


Seepage170





Seepage137


None


None



None



None





G4- DMA (FS2)


Seepage137

G4- DMA (FS5)


Seepage138


Active ownership

G4-FS10


Seepage138

G4-FS11


Seepage139

G4-FS12




G4-DMA (FS15)


Seepage137

Energy G4-CRE1


Water G4-CRE2


Emissions G4-CRE3


Seetableonpage147


G4-CRE8


Seetableonpage147




annual report and csr report 2020 - union investment

Documents